Investing.com -- Deutsche Bank has turned tactically negative on Enphase Energy (NASDAQ: ENPH), setting a 2027 adjusted earnings estimate of $1.73 per share—a full 21% below current Wall Street consensus—according to a research note from analyst Corinne Blanchard.

The firm’s projections sit below market expectations across key top-line and bottom-line metrics, forecasting 2027 revenue of $1.1 billion compared to the Street’s $1.2 billion consensus, which represents a 7% gap. The core of Deutsche Bank’s bearish thesis rests on what Blanchard views as dangerously optimistic assumptions embedded in consensus forecasts regarding safe-harbor revenues—pull-forward sales driven by U.S. solar policy incentives.

Deutsche Bank estimates Enphase recorded roughly $255 million in safe-harbor sales in 2026. Once those policy-driven revenues are stripped out, the consensus 2027 top-line estimate of $1.2 billion—which appears to imply a modest 4% year-over-year growth on its face—actually requires core organic revenues to surge by approximately 33% year-over-year. Blanchard was unambiguous in her assessment, calling this implied 33% organic ramp "overly aggressive and highly unrealistic."

The bank noted that its negative tactical call is driven by "exceedingly high expectations related to the safe harbor revenues continuity into 2027 and softer-than-expected core revenues growth in the coming quarters."

Critically, Deutsche Bank is not predicting a sharp third-quarter 2026 earnings miss when Enphase reports results. Instead, the firm views the post-earnings window as the moment of reckoning for broader 2027 estimates, stating that its catalyst call is predicated on a post-print downward reset of 2027 expectations rather than a weak third-quarter print in isolation. The bank’s fourth-quarter 2026 revenue forecast already sits 4% below consensus, adding near-term pressure to forward estimates.

This call lands against a backdrop of steep price declines. Enphase shares have fallen 23% over the past three months, tracking in tandem with the Invesco Solar ETF (NYSE Arca: TAN), which is also down 23% over the same period. Despite the selloff, Deutsche Bank characterizes investor sentiment on the stock as neutral to slightly negative on market conditions and core business growth, excluding safe harbor revenue headwinds—suggesting the market has not yet fully priced in the risk of safe-harbor revenue cliff effects.

The trajectory of the investment thesis hinges on two primary watchpoints. First, management guidance and commentary during the upcoming third-quarter 2026 earnings release will frame safe-harbor assumptions for the coming year. Any signal that policy-driven sales will not repeat at 2026 levels could trigger the broad Street revision cycle Deutsche Bank anticipates. Second, if consensus 2027 EPS moves toward the bank’s $1.73 target from current implied levels, the resulting downward revision would represent meaningful further downside risk for the stock.

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