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Deutsche Bank Attempts To Answer Some FAQs On SunPower

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Deutsche Bank Attempts To Answer Some FAQs On SunPower

SunPower Corporation (NASDAQ: SPWR) charged higher Wednesday up nearly 6 percent as Deutsche Bank weighed in on some frequently asked questions on the clean energy technology company.

Despite the jump in share price, an increasingly competitive pricing environment surrounding clean energy technology could put SunPower's 2017 EBITDA guidance of $300–400 million range at risk.

Is 2017 Adj. EBITDA Guidance Achievable?

"We see increasing risks to this guidance. SPWR expects to close 1.1GW of power plants in 2017 (deploy 1.1GW out of a total of 1.6GW of shipments) and the low end of the EBITDA guidance assumes NO contribution from the power plant segment," according to Deutsche Bank.

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Visibility Within Power Plant Segment For 2017?

According the most recent earnings call, "nearly 50 percent of the 1.1GW of 2017 shipments in the Power Plant segment were booked."

"The company still needs to book another 550MW of power plant business in order to achieve its 2017 targets. Some of the power plant projects for next year are in Mexico with the rest in the US, Chile, France. There are no one or two large projects that need to get done in 2017 and there are no legacy projects as well"

Total Stake?

"We do not expect Total to do anything meaningful with their stake in SPWR since it is such a small portion of Total's overall earnings and the company is also more focused on its own operations as well as opex," the analysts said. "That said, we believe Total is very committed to the long-term success of SPWR and should continue to prove project level support for the power plant segment if and when the company needs it."

Deutsche Bank has a $9 price target on SunPower with a Hold rating.

At last check, SunPower was up 6.78 percent at $8.82.

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Latest Ratings for SPWR

DateFirmActionFromTo
Jun 2019DowngradesOutperformMarket Perform
Jun 2019UpgradesNeutralBuy
Apr 2019AssumesNeutral

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