SunPower Jumps 7% on Google Partnership, Deutsche Bank Upgrade

On Wednesday, Deutsche Bank upgraded shares of SunPower Corporation

SPWR

from Hold to Buy and raised the price target from $33 to $38. The upgrade Analyst Vishal Shah's upgrade is based on five reasons:

Less dependent on China demand for earnings.
Well positioned to benefit from ongoing strength in Japanese market.
”Cost reduction progress appears to be ahead of schedule with Oasis cost reduction ~1 year ahead of schedule,” the analyst said.
Demand for yieldco ready projects is very strong according to channel checks.
Additional upside could be provided from increased leasing capacity along with other international markets.

According to Shah, SunPower “has ~4+MWac of unbuilt utility scale project backlog which can drive incremental $0.60+ EPS accretion in 2015/16.” In addition, “ongoing financing capacity ramp should drive $0.50-0.60 EPS in tax/depreciation monetization in 2015, while margin growth and increased shipments across EMEA/APAC regions should drive ~120% EPS growth to $0.60,” said Shah. Shares of SunPower are up 7.4 percent to $31.47. The stock is also getting a big boost from news that Google

GOOGwill commit

to a $100 million residential solar lease deal.

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