Deutsche Bank’s Vishal Shah maintained a Buy rating for SunPower Corporation SPWR, while adjusting the price target to $37. The company’s Q4 results included Quinto revenue recognition, while “upbeat management tone focused on positive ITC impact and potential market share gains as the company invests heavily in P Series modules over the next several years.”
SunPower reported Q4 revenue and non-GAAP EPS of $1,364M and $1.73, beating the Deutsche Bank estimates of $1,272M and $1.60 and consensus expectations of $1,271M and $1.52, respectively.
The company projected FY16 revenue and non-GAAP EBITDA at $3.2-3.4B and $450-500M, versus the Deutsche Bank estimates of around $3.5B and $528M and consensus expectation of about $3.4B and $437M, respectively.
Analyst Vishal Shah mentioned the key points as:
- SunPower has plans to increase capacity to ~4GW, including P-Series modules, over the next several years, as compared to its 2016 capacity guidance of ~1.85GW.
- The company pulled ~$65M in EBITDA into Q4, due mainly to the Hooper project acceleration, residential lease acceleration, and 8point3 equity in earnings contribution
- “Management suggested some willingness to push out projects into 2017 but did not update guidance due to ITC”
- SunPower has entered into another utility partnership with TXU in Texas
- The company’s pipeline increased to ~14GW in Q4, composed of 4.1GW Americas, 1.28GW Europe, 6.15GW Middle East/Africa and 3GW APAC.
- “The company dropped down Kern County to 8point3 and has next plant on offer as well”
- The recently-closed tax equity fund is likely to provide needs for this year
- Commercial margins were lower in Q4 on account of polysilicon charge
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