BMO Capital has revised its stance on Enphase Energy (NASDAQ: ENPH), moving the stock from an Underperform rating to Market Perform and increasing its 12-month price target to $41.00 from $31.00. The shares are trading near $37.28, and available valuation data indicate the stock is trading below its Fair Value assessment.
The upgrade follows Enphase’s revenue guidance for the first quarter of fiscal 2026, which a BMO analyst had flagged as the key test for the firm's cautious positioning heading into the year. Enphase issued a Q1 revenue range of $235 million to $265 million, excluding volumes tied to safe harbor provisions. That range sits around the company’s earlier, softer midpoint guidance of $250 million and came in ahead of BMO’s prior projection of $227 million.
BMO Capital cited the company’s commentary that pointed more clearly than expected to higher revenue in the second quarter of 2026 as the principal catalyst for the change in rating. The firm had kept an Underperform view on Enphase since before the company’s third-quarter earnings report, and the updated directional guidance for sequential quarterly growth prompted analysts at BMO to shift to Market Perform.
Separately, Enphase released its fourth-quarter 2025 financial results, which showed the company beating analysts’ estimates on both earnings per share and revenue. Reported EPS was $0.71 versus a forecast of $0.58, while revenue totaled $343.3 million compared with an expected $341.3 million. These results represent a modest outperformance relative to expectations.
Despite the positive beat on fundamentals, the stock experienced a slight pullback in aftermarket trading following the release, with the share price closing at $36.24, down 0.63% on the session. The mixed market response highlights that even when results top estimates, near-term trading can reflect a range of investor reactions.
What changed - The upgrade from BMO centered on clearer near-term revenue direction and a Q1 guide that exceeded the firm’s expectations, prompting the move from Underperform to Market Perform and the $10 increase in price target.
What investors will watch - Market participants are likely to monitor sequential revenue trends into Q2 2026 and how the company’s outlook evolves relative to the guidance that excluded safe harbor-related volumes.