Analyst Rating Roundup On SunPower (SPWRA)

Several analyst ratings announcements and notes on Sunpower (SPWRA) following its earnings report to cover this morning… Hat tip to Street Insider for the analyst comments.

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Citi maintains its Sell rating and lowered the price target from $15 to $12.  “In the very near-term, SPWRA has dramatically underperformed peers like First Solar (FSLR) (~3500bps in the past 7 weeks), thus hard to be overly negative even following a mixed report. Beyond the tightening of this spread, however, the much-ballyhooed module business appears apt to shrink to only ~25% of revs in 2011 and sustainably no better than 10-15% gross margin even assuming SPWR is able to maintain a decent (~$0.25-0.30/W) pricing premium versus today’s unsustainable $0.70/W. This all implies little to no EPS power in the module biz and raises the potential for a PP&E write down at some point (much like ENER) which would cut book value.”

RBC Capital maintains its Sector Perform rating on SunPower (SPWRA), but lowers the price target from $26 to $20.  Is it just me or does RBC Capital appear to have their head in the sand?  They have completely missed the boat on both AONE and SPWRA.

Wedbush upgraded from Underperform to Neutral and maintains its price target of $15.  The firm notes that SunPower said it expects to install at least 150MW during this year and sees cost reductions keeping pace with average selling price declines of up to 20%.  It lowered its FY10 sales estimate from $2.105 billion to $2.082 billion and its GAAP EPS estimate from $0.32 to $0.24. The Street is currently looking for FY10 sales of $2.08 billion.

Auriga maintains its Hold rating and $15 price target.  “While 2010 guidance was reiterated, over 40% of revenues are now designated for recognition in Q4. The Street had no prior guidance for Q2, and with the newly provided guidance for each remaining quarter of 2010, Street models will need to come down considerably for Q2. The management team was optimistic, but likely not enough to get the stock moving up in the near term. The discussion largely focused on SunPower’s transformation into an EPC business model, a topic that investors have yet to see yield tangible results. We see little reason to be involved with the stock and would suggest finding other solar investments. Downside is likely limited to 1.0x book/share of $14.75, although we note that tangible book value is now just $10/share given the recent acquisition of SunRay.”

UBS maintains Neutral rating, but lowers price target from $22.50 to $17 and slashed EPS estimates.  FY10 EPS estimates cut from $0.45 to $0.02 and FY11 from $2.00 to $1.55.

Needham maintains Buy rating, but lowers price target from $26 to $20.  “SunPower reported mixed 1Q10 results and “only” reiterated its 2010 guidance, which is likely to disappoint investors. The results confirmed the strength of its components business and its ability to maintain price premium; however, investors are likely focused on the risks associated with the revenue recognition of its project development business. Despite the nearterm concerns, we believe SunPower continues to strengthen its project pipeline, which could translate to meaningful topline growth in 2011 and beyond.”

Shares of SPWRA are getting hammered again today, down over 7%.

===> Click Here For Your FREE Sunpower Trend Analysis

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