Enphase Energy (NASDAQ:ENPH) shares climbed Friday after Guggenheim analyst Joseph Osha upgraded the stock from Sell to Neutral, citing a more fairly valued share price.
However, Guggenheim did not assign a price target and warned that significant long-term challenges remain. Osha made it clear that the upgrade doesn't signal easing troubles for Enphase. The company continues to struggle with weak international demand and fierce competition from Tesla (NASDAQ:TSLA) in the U.S.
Looking ahead, Guggenheim expects Enphase's 2026 growth to fall short of Wall Street's expectations. To improve its outlook, Osha suggests Enphase revise its pricing strategy, as its current margin structure may not be sustainable. However, there's no sign that management is making those adjustments. Additionally, higher interest rates, shifting regulations, and potential solar incentive cuts could add further pressure on Enphase and the broader residential solar industry.
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