Solar stocks slide after NextEra cites tariff probe for project delays

Apr. 21, 2022 3:55 PM ETEnphase Energy, Inc. (ENPH)SEDG, NEE, SHLS, ARRY, SPWR, DQ, MAXN, JKS, CSIQ, FSLR, TAN, FTCIBy: Carl Surran, SA News Editor48 Comments

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Enphase Energy (NASDAQ:ENPH) and SolarEdge Technologies (SEDG) are two of the five biggest decliners on the S&P 500 Thursday, -12.3% and -9.6% respectively, as solar stocks fall broadly following NextEra Energy's (NEE) disclosure that the U.S. government's probe into solar panel imports will delay the company's solar and storage projects by at least a year.

Solar names trade sharply lower across the board: (SHLS) -14.5%, (ARRY) -11.9%, (SPWR) -9.6%, (DQ) -9.3%, (MAXN) -9.1%, (JKS) -8.6%, (CSIQ) -6.7%, (FSLR) -3.1%; ETF: (TAN) -6.7%.

Three-quarters of solar companies say deliveries have been affected since the U.S. Commerce Department announced its investigation last month, according to the Solar Energy Industries Association trade group.

In Thursday's earnings conference call, an exasperated NextEra CEO John Ketchum discussed the probe, rhetorically asking analysts how the Biden administration could "pull the rug out from under the industry," slamming his hands on his desk with every word.

The company expects final tariff amounts to remain unknown until early 2025, assuming U.S. trade officials conclude their probe by 2023.

Also, FTC Solar (FTCI) -7.6% as Piper Sandler downgrades shares to Underweight from Neutral with a $3 price target, cut from $4, seeing "an above average probability that FTCI cuts guidance as the company's initial outlook incorporated a soft-landing on AD/CVD. Bookings had already meaningfully decelerated before the investigation was announced and has probably halted since then."

Enphase Energy (ENPH) shares trade at a high valuation premium due to the company's "explosive revenue and earnings growth potential," True Orion writes in a bullish analysis posted recently on Seeking Alpha.

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