SunPower Corporation SPWR has the potential for better margin expansion, and there is greater visibility into the solar panel manufacturer's cash flow growth going forward, according to Morgan Stanley.
The SunPower Analyst: Stephen Byrd upgraded SunPower from Underweight to Equal-Weight and raised the price target from $5.30 to $10.50.
The SunPower Takeaways: Following the recent spin-off of its manufacturing unit, the restructured company has improved market opportunity and a stronger business model, with more potential for margin expansion and cash flow generation, Byrd said in the Friday upgrade note.
“We are increasing our 2021 EBITDA estimate from $77m to $116m to reflect a stronger rebound in growth into 2021, with revenue growing 31% YoY (+$150m vs. our prior estimates),” the analyst said.
The stock underperformed in 2020 until the spin-off on Aug. 27, he said. It has since outperformed by 20%, “keeping us from going OW as we think the market has better recognized the value of the pureplay installation business,” Byrd said.
SPWR Price Action: SunPower shares were rising 3.03% to $10.19 at last check Friday.
Photo courtesy of SunPower.
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