The clouds that have been hanging over Enphase Energy (ENPH 3.80%) stock seem to have lifted. While shares of the solar stock had plunged more than 7% from the start of the year through the end of trading last week, an analyst's auspicious report on the stock shifted investor sentiment and encouraged a buying spree.
According to data provided by S&P Global Market Intelligence, shares of Enphase Energy had risen 11.4% from the market's closing last Friday through the end of trading yesterday -- an especially noteworthy movement, considering the S&P 500 had only inched 0.1% higher during that time.
This analyst is hot on Enphase's product portfolio
Assigning an outperform rating and a $140 price target, RBC Capital started coverage on Enphase stock this week, and investors clearly took note. RBC Capital analyst Chris Dendrinos predicated the outlook, in part, on the company's "robust competitive moat," according to The Fly. Additionally, the analyst believes that investors will soon be warming up to solar stocks like Enphase.
RBS Capital's bullish take on Enphase is merely the latest example of other optimism that has been growing around the stock. On Feb. 7, for example, Craig-Hallum hiked its price target on Enphase stock to $159 from $113.
Does this green energy stock deserve a green light for investors to click the buy button?
Oftentimes, analysts have shorter time horizons than the multiyear holding periods that we favor, so investors shouldn't put too much weight into RBC Capital's price target. Nonetheless, those who are looking to power their portfolios with Enphase for the long term would be wise to pick up the stock now. Enphase is a leading residential solar installer, and it has diversified its portfolio beyond the microinverters that were the original source of the company's business.
