Crisis May be Opportunity in Shares of Enphase (ENPH)

Sep 21, 2023
Blue photovoltaic solar panels mounted on building roof for producing clean ecological electricity at sunset. Production of renewable energy concept.

Investors may want to pay close attention to beaten down solar stocks, like Enphase (ENPH).

After plummeting from $192.75 to about $120, the stock appears to have caught strong support. It’s also over-extended on RSI, MACD, and Williams’ %R. Helping, an insider recently bought more than $4 million worth of the stock. And analysts are turning bullish.

In fact, according to Seaport Research – which now has a price target of $185 – the company should continue to benefit from ongoing stock buybacks, and solar strength in Europe. The firm also believes the rebound will happen because, according to MarketWatch:

  1. The California market will have adjusted to the economics of the new solar billing structure, NEM 3.0, which cut the credits residential customers receive for generating excess solar energy.
  2. Finalization of the Inflation Reduction Act and its assimilation will strengthen the response to the IRA’s investment tax credits (ITC) incentives.
  3. By then, it will become clear that interest rates have peaked, and the Federal Reserve will prepare to “imminently pivot” to lowering rates in the second half of 2024.

Shares of ENPH last traded at $125.50 – up about $1.54 on the day. We’d like to see the ENPH stock initially refill its bearish gap around $150 a share, and then potentially refill at $170.