JPMorgan has overhauled its ratings on multiple US solar stocks amid shifting market and policy conditions. The firm downgraded Enphase Energy (ENPH.US) and SolarEdge Technologies (SEDG.US) to "Neutral" while elevating Sunrun (RUN.US) to its preferred position.

Enphase Energy's rating was cut from "Overweight" to "Neutral", with its price target slashed from $64 to $37. This adjustment reflects mounting price pressures and margin compression as the industry pivots toward third-party ownership models. Despite these challenges, JPMorgan maintains that Enphase deserves its valuation premium, citing its rare status among upstream solar players as a consistently profitable company generating positive cash flow with net cash reserves.

Analyst Mark Strouse cautioned that near-term catalysts appear limited for the US residential solar market under the Inflation Reduction Act, potentially creating headwinds for Enphase's market share and gross margins.

SolarEdge Technologies also faced a downgrade from "Overweight" to "Neutral" with a $23 target, following its remarkable 34% surge this month. Strouse noted SolarEdge maintains a relatively strong position in the US residential inverter market, benefiting from the transition to third-party ownership structures and reduced competition due to new foreign entity regulations.

Sunrun emerges as JPMorgan's standout choice in residential solar, receiving an "Overweight" rating with its target price boosted from $13 to $16. The upgrade stems from enhanced visibility in solar lease/power purchase agreements, securing Sunrun's eligibility for Section 48E tax credits through 2027 and storage incentives until 2032.