Jefferies Financial Group Inc.: Enphase Energy's short-term revenue is expected to surpass expectations, upgraded to "hold" rating.

On Thursday, Jefferies Financial Group Inc. upgraded Enphase Energy's rating from "underperform" to "hold" with a target price of $36. The reason for the upgrade is the expectation of better-than-expected revenue in the short term, but the company also acknowledges concerns about the future of residential solar over the next few years. Recent guidance from the U.S. Treasury Department has been favorable for the residential solar industry; however, Enphase's stock price has only increased by about 10%. Jefferies Financial Group Inc. analyst Julien Dumoulin-Smith believes that there is a disconnect in the market regarding the value of safe harbor clause expenditures. He stated that, given the likelihood of the investment tax credit policy continuing until 2030, this disconnect is likely to persist. Dumoulin-Smith downgraded Enphase's rating in November 2024, but now he believes that with the visibility of the investment tax credit policy extending until 2030, the situation has improved in the short term. The company is expected to achieve better-than-expected revenue by the third quarter of 2026, as third-party owners (TPOs) are rushing to make purchases by July 2026 to take advantage of tax benefits. In his upgraded report, the analyst wrote, "Yes, there are significant long-term issues, but at least in the medium term, we believe it is time to recognize the positive aspects." On August 19, Enphase Energy announced a new safe harbor agreement with another leading solar and battery financing company, providing TPO agreements for homeowners, including leasing and power purchase agreements (PPAs). This is the second agreement reached since the signing of the new U.S. federal budget law in July 2025. The agreement was signed in early August and is expected to bring Enphase about $50 million in revenue, highlighting the company's strong participation in the TPO sector - a key growth channel for the residential solar and battery business in the U.S. The safe harbor agreement covers Enphase's IQ8HC microinverter manufactured in the U.S., which helps future projects maintain eligibility for the Investment Tax Credit (ITC) and Domestic Component Awards. By including the equipment in the safe harbor agreement now, solar companies can lock in current tax credit eligibility and reduce the risk of future policy changes.