By Sam Boughedda
Enphase Energy (NASDAQ:ENPH) shares jumped Thursday after it was picked as a catalyst call buy idea at Deutsche Bank by its analysts.
The analysts told investors in a note that the basis for the short-term investment idea follows weakness in the stock, which has been a "material underperformer YTD" down 24% vs. a 20+% gain compared to the direct peer group.
At the time of writing, Enphase is up more than 5%, heading towards the $207 per share mark.
"We think this has been driven by a cautious tone from management in early January on US residential demand and origination trends in the California market, which seem to have rebounded sharply since then. Investors seemed to then favor peers with less direct US / California exposure," the analysts wrote.
They believe this has opened the opportunity for an attractive valuation level, with "ENPH's strong execution, top-notch products vs competitors and the upcoming 75% increase of its manufacturing capacity based in the US," helping to support margin growth, giving Deutsche Bank the view that ENPH's stock is well-positioned.
"In the short-term, we expect a strong 1Q23 EPS beat (17% on a non-GAAP basis) vs consensus, and better than expected 2Q23 guidance vs investor sentiment and the Street," they added.