Mizuho: SunPower Opportunity Isn't Right Now, Stay Neutral

SunPower Corporation SPWR addresses a large and growing market. Mizuho’s James von Riesemann initiated coverage of the company with a Neutral rating and a price target of $25, saying that the opportunities may be significant, but they are slow to materialize.

Large Opportunity

The global addressable market is expected to grow by about 55GW through 2015-2020, with about 40GW from Asia. In the US, rooftop PV could nearly double, adding another 1,118GW, which is what the country's installed capacity is currently at. Despite this growth, it represents merely 39 percent of annual MWh sales in the US, James von Riesemann said.

Slow To Materialize

The analyst added, however, that the integration of significant rooftop PV requires a flexible grid, supporting infrastructure and enabling technologies. “The regulatory process for addressing the technology and rate structures issues is slow; once resolved, we think there will be broader-based acceptance of DG products.”

While SunPower faces attractive opportunities to expand in the distributed generation solar market and national policy is favorable, “implementing "green policy" at the individual state level requires significant regulatory oversight and system redesign,” Riesemann commented.