A steep price-target lower wounded SunPower (SPWR 1.38%) inventory over the previous few buying and selling days. The corporate notably took it on the chin the day the discount was enacted. All in all, the corporate’s market worth slumped by 9% over the course of the week, in response to knowledge compiled by S&P World Market Intelligence.
The analyst doing the chopping was Andrew Percoco of influential funding financial institution Morgan Stanley (MS 1.29%). Earlier than market open Wednesday, Percoco sliced his SunPower value goal to $8 per share, far down from his previous degree of $17. In doing so, he maintained his equalweight (learn: maintain) advice on the photo voltaic power inventory.
It wasn’t obvious why the analyst lowered his value goal and why he did so to such a level. Nevertheless, it is doubtless no coincidence that the transfer comes barely a month after SunPower launched its newest set of quarterly outcomes. The corporate missed notably on each the highest and backside strains.
Compounding that, it additionally made important downward revisions to its steerage for the full-year buyer depend and, particularly, its internet revenue.
SunPower cited comparatively weak anticipated demand within the Southeast and Southwest as a key purpose for its steerage revision. Going ahead, it plans to scale back each its workforce and its quantity of investments. Neither growth bodes notably effectively for its rapid future — therefore, the final bullishness clouding the corporate for the time being.
Buyers should not fully dismiss SunPower as an funding. Photo voltaic penetration on this nation is low. In the meantime, such energy programs are actually extra accessible and reasonably priced than ever. The corporate definitely has an opportunity to proper the ship. Maybe when it begins to take action, analysts like Percoco will turn out to be SunPower bulls once more.
Eric Volkman has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.