Friday, July 24, 2009

SunPower Soars 27% on Q2 Beat; Upgrades Galore (SPWRA)

Through all the ups and downs over the last year I have the impression that the solars have led the general market in the magnitude of the moves and possibly been an indicator. This is a subjective observation, I haven't gone back to check the numbers but I do have a fairly good memory.
[which explains all the self-reverential links? -ed]
Here's the chart of the SPX and a solar ETF (via BigCharts):

Today Tech Trader Daily has some of the reaction to SPWR's numbers:

Price targets and estimates are going up today for SunPower (SPWRA) after the company last night easily beat estimates for its Q2 and raised the bottom end of the range for full-year revenue. The stock is soaring this morning, and has won at least a couple converts.

Dan Ries with Collins Stewart today raised the stock to “Hold” from “Sell,” writing that the company’s 76% jump in module sales (as opposed to full solar systems) enabled the company to lower inventory by $80 million and cut its inventory days nearly in half. “That reduces the inventory-related risk the company has faced since its inventory ballooned by $90 million in the first quarter” of 2009, writes Ries. Ries raised his estimates to $1.39 billion in sales this year, up from $1.34 billion, and raised his EPS estimate to 47 cents from 40. However, trading at more than 20 times his 2010 EPS estimate, he thinks the stock is a Hold.

FBR Capital’s Mehdi Hosseini raised his rating to “Outperform” from “Market Perform,” and rasied his price target to $40 from $22. Although last night’s report was a “mixed bag,” he believes funding for cheaper roof-top installations of solar panels, as opposed to more extensive “ground-based” installations, “should be available and could actually get better in calendar year 2010,” and that this roof-top segment is SunPower’s “sweet spot.” Although Hosseini has been cautious in past on solar system and module makers, “we now believe the rooftop segment, especially in the U.S.” Hosseini thinks SunPower will be a better investment than First Solar (FSLR), which is focused on ground-based installations, he writes....MORE