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Morgan Stanley Raises SunPower Price Target

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In a note out Wednesday, Morgan Stanley analyst Timothy Radcliff increased his price target on SunPower Corporation (NASDAQ: SPWR) to $45, maintaining an Overweight rating.

Radcliff feels a Joint YieldCo between SunPower and First Solar, Inc. (NASDAQ: FSLR) would be better than a standalone SunPower company. First Solar and SunPower are in advanced talks to create a joint Yield Co, which would generate growth based on drop-downs from both companies. Although the structure is different than he expected, increased value capture from developed projects is his important takeaway.

Related Link: Why First Solar, SunPower YieldCo Is Like Coke And Pepsi Coming Together

Radcliff goes on to note, "Increasing PT to $45. We are transitioning our valuation framework to account for 100% probability that SunPower launches a Yield Co, and increasing our PT to $45. Although our framework does not yet reflect true economic split between the two, we believe our model does a reasonable job of capturing value.

"SunPower remains our top pick among solar developers, with more than 35% upside to our $45 PT from Tuesday's closing price of $33. In addition to the upside afforded by the joint Yield Co, we believe the company's differentiated technology will continue to differentiate SunPower's offering in the marketplace."

Latest Ratings for SPWR

Oct 2016Deutsche BankMaintainsHold
Sep 2016Williams CapitalInitiates Coverage onHold
Sep 2016JMP SecuritiesInitiates Coverage onMarket Underperform

View More Analyst Ratings for SPWR
View the Latest Analyst Ratings

Posted-In: Morgan Stanley Timothy RadcliffAnalyst Color Price Target Analyst Ratings


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