Enphase Energy is set to join the S&P 500 index on Jan. 7. The inclusion will place the solar energy stock among the most valuable companies on the benchmark index. Enphase closed 1.5% higher on Thursday.
Enphase Energy (ENPH), which currently trades on the S&P MidCap 400, will replace Tiffany & Co. in the S&P 500. The change comes after Tiffany shareholders recently agreed to a takeover by French luxury goods giant LVMH. The merger is expected to close on Jan. 7.
Meanwhile, Capri Holdings Limited, a member of the S&P SmallCap 600 will take Enphase Energy’s place in the S&P MidCap 400.
Earlier in October, Enphase reported better-than-expected 3Q results. The company’s EPS of $0.30 per share beat analysts’ estimates of $0.24 per share. Revenues of $178.5 million also exceeded the Street’s estimates of $169.3 million.
On Dec. 24, Roth Capital analyst Philip Shen raised the stock’s price target to $220 (25.4% upside potential) from $160 and maintained a Buy rating. In a note to investors, Shen said that solar energy stocks have had a significant run-up through 2020. Looking ahead, Shen expects multiple expansion across the solar sector to continue in 2021.
From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 9 Buys and 6 Holds. The average analyst price target stands at $132.69, which implies downside potential of about 24.4% to current levels. The stock has skyrocketed 571.5% in 2020.