Shares of Enphase Energy (ENPH) rose on Friday after Guggenheim, led by five-star analyst Joseph Osha, upgraded its rating from Sell to Neutral without assigning a price target. The upgrade is due to Guggenheim’s view that Enphase’s stock is fairly valued, but the analyst firm still expects significant long-term challenges for the solar inverter company.
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Osha emphasized that the upgrade should not be seen as a sign that Enphase’s challenges are easing. Indeed, the company continues to face weak demand outside of the U.S. and intense competition from Tesla (TSLA) within the U.S. As a result, Osha believes that Enphase’s growth prospects for 2026 and beyond are lower than what Wall Street expects.
To achieve better growth, Osha suggests that Enphase needs to adjust its pricing strategy and acknowledge that its current margin structure is unsustainable. However, he sees no indication that the company’s management is willing to make these changes. In addition, Osha pointed to higher interest rates, as well as less supportive regulatory policies and potential reductions in solar incentives, as ongoing challenges for Enphase and the residential solar industry.
Is Enphase Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ENPH stock based on 10 Buys, 11 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 41% decline in its share price over the past year, the average ENPH price target of $82.86 per share implies 32.6% upside potential.
