Key Numbers
- 39%: Year-to-date decline in Enphase stock
- 4.2%: Drop in ENPH shares on Tuesday following downgrade and executive order
- 75%: Share of revenue derived from the U.S. market
- $45: TD Cowen price target, down from $58
- 45 days: Timeframe for tax‐credit termination after law enactment
Enphase Energy (NASDAQ:ENPH)’s shares plunged after TD Cowen downgraded the stock to hold and cut the price target to $45, as President Trump’s directive to eliminate clean-electricity tax credits within 45 days of the new law clashes with looming tariffs on China-sourced battery cells. This double hit threatens to sap U.S. residential solar demand and cements Enphase as one of the S&P 500’s weakest performers.
TD Cowen analyst Jeff Osborne warns that the credit expiration at the end of 2025 will erode customer-owned residential demand, already pressured by elevated interest rates. With 75% of Enphase’s revenue tied to U.S. homeowners rather than lease fleets, Osborne forecasts inventory buildup and slower permit-driven installs in late 2025, though some buyers may accelerate purchases to lock in credits.
Margins face additional strain from tariffs on Chinese battery cells. Enphase plans to qualify non-Chinese suppliers early next year, but near-term profitability may dip until alternative sources are fully onboarded.
Risk-tolerant growth investors may find Enphase compelling at current levels, given its technological leadership and potential for a post-credit rebound. The stock is down 39% year to date.