Gleacher & Co. reiterated its Buy ratings on Sunpower (SPWRA) and MEMC Electronic Materials (WFR) today. Hat tip to Street Insider for the analyst comments. The firm has a price target of $19 on WFR which is about 75% above current levels and a $21 price target on Sunpower (SPWRA) which is about 50% above current levels.
On WFR: “WFR is scheduled to report its 2Q10 results on Thursday, July 29, 2010, after the market close. Solar wafer pricing appears to have continued to hold up through Q2 into Q3, buffering materials margins from further deterioration beyond what was seen in 1Q10. Q2/Q3 semi pricing was largely locked-up in Q1. In our view, MEMC will have to make the most of its hay going forward on cost as pricing is unlikely to help much into 2011. We see WFR benefiting nicely from bringing solar wafering in-house in 2011. We believe monetization of Italian projects for SunEdison in 2H10 will be the next catalyst.”
Shares of WFR cleared resistance of the 50 day moving average today, up about 5%.
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On SPWRA: “We expect SunPower to report 2Q10 results in early August. Following rough 1Q10 guidance on lumpy systems revenue recognition, SPWRA is set to post improving results through the end of 2010. The stock is getting very interesting on a sum-of-the-parts basis at roughly $13/share, and we see current fundamentals as additive to that story given strength into 2H. With SPWRA’s stake in Woongjin trading at approximately $3.00/share, and valuing the company’s pipeline assets at $9.00/share, in-line with recent transactions, investors can own the remaining manufacturing assets and interests for less than $200mil.”
Shares of SPWRA surged 9% today, bouncing off support at the 50 day moving average. The bullish action that begin in May continues as the stock makes a series of higher lows.