Enphase Energy (NASDAQ:ENPH) was downgraded to Peer Perform from Outperform at Wolfe Research Thursday, with analysts removing the stock price target.
They told investors in a note that they are now more cautious about U.S. residential solar.
"The rates-driven downturn in U.S. resi is tracking worse than we expected, we see another guidance miss for 3Q and hyper Europe growth may slow," the analysts wrote.
"Our $724M revenue forecast for 3Q represents (0.5)% sequential growth and is below the consensus est. of $757M which suggests mid-single-digit growth," the analysts added.
They noted that growth is being challenged by higher rates which "hurts the economics of loan products, which ENPH is over-indexed to." In addition, they explained that headwinds have been compounded by NEM 3.0 in CA where customer savings are now marginal without the inclusion of an expensive battery.