SunPower's Management Transparency & Repositioning As Residential Solar Competitor Gain Analysts' Confidence

  • Credit Suisse analyst Maheep Mandloi upgraded SunPower Corp SPWR from Underperform to Neutral and cut the price target from $21 to $17.
  • The re-rating was on valuation after the stock traded in line with the analyst's revised price target and as management addressed key investor concerns and valuation versus peers. 
  • The reduced price target reflects analyst's reduced EBITDA growth in 2023 and 2024 due to higher asset cost of capital partially offset by higher electric bills
  • Guggenheim analyst Joseph Osha initiated coverage on SunPower with a Neutral rating.
  • The company's efforts to reposition itself purely as a residential solar competitor bear fruit, and he thinks the new management team has the proper focus. 
  • Residential solar developers are seeing robust industry growth due to rising utility rates, concerns about resiliency, and, more recently, the passage of the Inflation Reduction Act (IRA).
  • He expressed confidence in the industry growth outlook and SPWR's ability to participate in industry growth. 
  • Continued industry consolidation should prove beneficial for large residential developers like SPWR, and there are elements of the IRA that appear to provide an advantage to large developers as well.
  • The stock appears fair value to him.
  • Price Action: SPWR shares traded higher by 16.50% at $22.31 on the last check Thursday.
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