JP Morgan Downgrades Enovix to Neutral, Raises Price Target to $12

JP Morgan Downgrades Enovix to Neutral, Raises Price Target to $12

JP Morgan analyst Bill Peterson has downgraded Enovix Corporation (ENVX) from Overweight to Neutral, while raising the price target to $12.00. The analyst cited concerns over the stock's valuation, which has soared 91% since 'Liberation Day.' Despite a favorable market environment and positive news about capital allocation, Peterson believes the stock price already reflects much of the company's potential success [3].

Enovix, which designs, develops, and manufactures lithium-ion battery cells, has seen a significant increase in its stock price recently. The company's shares closed at $14.56 yesterday, following the downgrade [3]. The price target increase from $9 to $12 indicates a potential downside of 18% from current levels [1].

Peterson's rating change does not reflect diminished confidence in Enovix's prospects. Instead, he sees the stock as having overshot its earnings potential over the next 2-3 years. The analyst continues to model Enovix reaching 4 lines' worth of capacity at Fab-2 by 2028, a scenario that some bearish institutional investors may already think is overly ambitious [3].

In contrast, another analyst, Craig Hallum, recently lifted the price objective on Enovix's stock to $15 from $12, while keeping a "Buy" rating. This comes after Enovix released its preliminary June results with revenue and adjusted EBITDA surpassing the midpoint of previous guidance [4].

Enovix has also announced the acquisition of battery cell manufacturing assets from SolarEdge, located in South Korea, which is expected to expand its manufacturing footprint and help cater to growing demand in the broader defense industry [4].

References:
[1] https://www.tipranks.com/news/catalyst/why-enovix-shares-are-facing-a-downgrade
[2] https://www.marketscreener.com/news/t-mobile-us-jp-morgan-reiterates-its-buy-rating-ce7c5cd3dd81f721
[3] https://www.streetinsider.com/Analyst+Comments/JPMorgan+Downgrades+Enovix+Corporation+%28ENVX%29+to+Neutral/25090224.html
[4] https://finance.yahoo.com/news/craig-hallum-lifts-pt-enovix-045320194.html