Shares of Enphase Energy (ENPH 5.44%) fell as much as 6.6% in trading Wednesday after an analyst changed their price target. Shares closed the day down 5.6%.
The news wasn't all bad for Enphase Energy today. JPMorgan analysts raised their price target on the stock from $99 per share to $146 per share and kept an overweight rating on the stock. So why did shares drop?
The real reason shares were down today is because of a broader sell-off in solar energy stocks on Wednesday. As a highly volatile stock in general, Enphase Energy will often exaggerate the market's moves on a short-term basis. That's what we're seeing today.
Volatility is to be expected for solar energy stocks right now, and it's not surprising to see a down day after a great run higher this year. Given that there wasn't any significant news and there was actually an analyst upgrade today, I wouldn't worry too much about the drop in shares. Enphase is still well-positioned to grow on the back of an improving solar industry, and that thesis hasn't changed today. Long-term investors are just getting a lower price than they would have been able to get yesterday.