Solar stocks are in the hot seat today, including Sunrun (NASDAQ:RUN), SunPower (NASDAQ:SPWR) and Enphase Energy (NASDAQ:ENPH). Why? Analysts from Barclays and Piper Sandler expressed concerns about the solar energy market in 2023 and even 2024, downgrading some solar stocks as a result. Now, the market is responding with heavy selling activity.
First of all, Barclays analysts expect residential solar companies’ growth to slow down this and next year. These companies could lose a major revenue source as California withdraws the state’s rooftop solar incentive, for example.
Barclays analysts downgraded RUN stock from “overweight” to “equal weight” and reduced Sunrun’s price target from $44 to $35 per share. Furthermore, the analysts also downgraded SPWR stock from “equal weight” to “underweight,” slashing their target price from $26 to $18.
Solar Stocks Are Getting Hammered
The impact on solar stocks this morning has been both immediate and severe. Granted, the Nasdaq is trending down as well. But shares of solar companies are being hit especially hard today.
As of this writing, RUN stock is down 13% for the day. Meanwhile, SPWR stock is in the red by more than 5%. These two aren’t the only solar plays to get sold off, either.
ENPH stock is also down more than 7% today and struggling to stay above the crucial $200 level. Enphase Energy, like Sunrun and SunPower, came into the crosshairs of another analytic firm.
According to analysts with Piper Sandler, weaker demand could induce a reset in the U.S. residential solar industry. As a result, Piper Sandler analyst Kashy Harrison downgraded Enphase shares from “overweight” to “neutral.” Harrison slashed his price target on ENPH stock from $350 to $255 as well. However, this still implies some upside compared to the current share price.
All in all, these Wall Street experts envision potential downside for the U.S. solar energy market, with implications for the share prices of Sunrun, SunPower and Enphase Energy in particular. Now, traders are apparently heeding their warnings, reacting promptly by selling solar stocks.
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.