Enphase Energy (NASDAQ:ENPH) saw its stock fall 4% on Wednesday after Goldman Sachs analyst Brian Lee issued a Sell rating, downgrading the solar technology firm from Buy and slashing his price target to $32, down from $77. The revised target implies a roughly 25% downside from Tuesday’s closing price of $40.94.
The stark shift in sentiment stems from growing operational headwinds and macroeconomic challenges, particularly linked to new trade tariffs — notably those affecting China — which have forced Enphase to restructure parts of its supply chain and lower expectations for near-term profit margins.
Lee had previously been optimistic on the company, citing the potential for a rebound in the U.S. residential solar market and the positive impact of new products like Enphase’s latest battery system and the IQ9 microinverter, which was expected to streamline costs and support entry into the commercial solar space.
However, in his latest note to clients, Lee signaled a significant shift in outlook.
“Following the recent resi solar tax changes, we believe the company’s outlook beyond 2027 is likely to remain under pressure,” he wrote.
In addition to tariff-related disruptions, Lee pointed to longer-term regulatory uncertainties and weakening industry fundamentals as reasons for a more cautious stance.
The downgrade highlights broader challenges facing the solar energy sector, where shifting policies, cost pressures, and geopolitical tensions are clouding the growth trajectory for key players like Enphase.
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