Tuesday, December 1, 2009

Pacific Crest's Bachman on SunPower - Buy Equal Parts SPWRA and Antacid (SPWRA)

Although it popped yesterday and is up another dollar today, Sunpower has been a miserable performer the last few months, what with the accounting issues. I don't think it has washed out quite yet and see no reason to chase it. Last trade $21.68, up $1.01.
From SmallCapPulse:
Pacific Crest’s Mark Bachman upgraded SunPower (Nasdaq:SPWRA) this morning and his price target to $29, noting that “the recent accounting debacle has created a unique buying opportunity.”

Key Takeaways

· Believes the stock assumes a lower margin profile on future revenue, with expectations of about 20% GMs going forward

· Thinks SunPower will “likely wrap good news around the results of its accounting investigation” and has based 2011 estimates on the prospect of projects yet to be announced crystallizing

· Substantial growth in systems is projected in 2010 and 2011

· In terms of FY09 results, expects EPS to fall below midpoint guidance at $1.20, with GM at 20.8%, which could lower EPS estimate for the year by $0.12 to $1.03 from $1.15...