Janney ‘reluctantly’ downgrades Enphase Energy to Neutral after Q4 guidance

Janney Montgomery Scott analyst Sean Milligan downgraded Enphase Energy (ENPH) to Neutral from Buy with a fair value estimate of $83, down from $119, after the company’s Q4 revenue guidance of $360M-$400M came in “well below” the previously discussed second half run-rate revenue target of $450M-$500M. The firm is “reluctantly cutting our rating to Neutral,” as the analyst says “it feels like the final capitulation regarding forward estimates, margins, and free cash flow remain supportive” and that new battery storage products in Q1 of 2025 should be margin accretive. However, the firm also acknowledges that the company lacks near-term catalysts before year-end, that European growth has “evaporated,” and that visibility on a new battery product might not emerge until Q1 2025 results.