UPDATE: Goldman Sachs Upgrades SunPower to Neutral Following Recent Street Earnings Revisions

In a report published Thursday, Goldman Sachs analyst Brian Lee upgraded the rating on

from Sell to Neutral, and raised the price target from $13.00 to $18.00. In the report, Goldman Sachs noted, “We upgrade SunPower to Neutral from Sell with roughly 9% downside to our new $18, 12-month price target. Our prior Sell rating was predicated on our negative view of: (1) SunPower's high cost structure relative to peers, (2) concentrated project portfolio (e.g., CVSR and AVSP) and (3) above-average exposure in Europe. While these factors – particularly project concentration and Europe exposure – continue to be longer-term risk factors, in our view, we have clearly been wrong on much improved near-term earnings visibility owing to a combination of higher-than-expected US project margins, solar leasing momentum, and to a lesser extent, demand upside in Japan. Following recent Street earnings revisions, our 2013-2014E EPS estimates are now largely in line with consensus and we see risk/reward more balanced. On a YTD basis, SPWR shares are +250% vs. GS US solar coverage +156% and the RUT +16%. Since being added to the Sell List on 6/15/11, SPWR is +11% vs. the RUT +28%.” SunPower Corporation closed on Wednesday at $19.64.