BMO Capital upgraded Enphase to ‘Market Perform’ from ‘Underperform,’ while hiking the price target to $41 from $31.
- BMO Capital expressed optimism about the solar energy firm’s revenue guidance for the first quarter of fiscal year 2026, stating that it expects Enphase to mark a sales bottom during the quarter.
- The firm also noted that Enphase’s second-quarter outlook was definitive, adding that the company expects sequential revenue growth.
- BMO Capital expects Enphase’s shares not to underperform as much as they have since the downcycle in residential solar commenced.
Enphase Energy Inc. (ENPH) shares were up nearly 25% in Wednesday’s pre-market session after the company’s fourth-quarter (Q4) earnings beat earned it a ratings upgrade.
According to TheFly, BMO Capital upgraded Enphase to ‘Market Perform’ from ‘Underperform,’ while hiking the price target to $41 from $31. This implies an upside of about 10% from the stock’s closing price on Tuesday.
Why Did Enphase Get An Upgrade?
Explaining the rationale behind its ratings upgrade and price target hike, BMO Capital expressed optimism about the solar energy firm’s revenue guidance for the first quarter of fiscal year 2026, stating that it expects Enphase to mark a sales bottom during the quarter.
The firm also noted that Enphase’s second-quarter (Q2) outlook was definitive, adding that the company expects sequential revenue growth.
BMO Capital expects Enphase’s shares not to underperform as much as they have since the downcycle in residential solar commenced. According to data from the Solar Energy Industries Association (SEIA), residential solar capacity registered a 31% decline in 2024, marking its first annual contraction since 2017.
Since the beginning of 2024 to date, ENPH stock has been down nearly 72%.
Enphase Points To Tailwinds In 2026
During a conference call with analysts following the Q4 results announcement, Enphase highlighted multiple tailwinds in 2026.
“The utility rates are going up everywhere in the U.S. And we see a lot of increases in the Northeast, in the Midwest. So I think that is going to be a definite tailwind for us,” said Enphase CEO Badri Kothandaraman.
He also stated that new financing options, such as prepaid leases, are becoming available for residential solar. The company sees this as an opportunity, he added.
Lastly, Kothandaraman also said that he expects the Fed to further cut interest rates this year, which should improve the affordability of the company’s offerings.
Enphase’s Q4 Beat
Enphase reported earnings per share (EPS) of $0.71 during Q4 on revenue of $343 million, beating Wall Street estimates of an EPS of $0.59 on revenue of $338 million, according to Stocktwits data.
“The sell-through demand for our products in the United States increased 21% in the fourth quarter of 2025, compared to the third quarter of 2025, and was at our highest level in more than two years,” the company said.
Enphase expects Q1 revenue to be in the range of $270 million to $300 million, including approximately $35.0 million of safe-harbor shipments. The analyst consensus for Q1 revenue is about $265 million.
How Did Stocktwits Users React?
Retail sentiment on Stocktwits around Enphase Energy was in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels. The ENPH stock was the fourth-most-trending ticker on the platform at the time of writing.
One user stated they might return to ENPH stock following the Q4 results.
ENPH stock is up 16% year-to-date, but down 42% over the past 12 months.
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