Wednesday, August 10, 2016

Solar: SunPower Plunges On Losses, Layoffs, Downgrades; First Solar Down 7% On Ratings Cuts (SPWR; FSLR)

It is very tough to make money in the solar biz right now.
SPWR down 27.20% at $10.76; FSLR $38.63 down 7.27%.

From Schaeffer's Investment Research:
Analysts are weighing in on solar energy stocks First Solar, Inc. (NASDAQ:FSLR), Solaredge Technologies Inc (NASDAQ:SEDG), and SunPower Corporation (NASDAQ:SPWR). Here's a quick roundup of today's bearish brokerage notes on FSLR, SEDG, and SPWR.

  • FSLR is set to lose 3.6% when the market opens, and potentially touch a new two-year low, after getting hit with a price-target cut to $46 from $67 at Mizuho, and another cut to $50 from $68 at Barclays. This comes after the stock's worst close of 2016, settling at $41.66 on Tuesday -- roughly 37% below its year-to-date breakeven mark. We noted the potential for bearish notes to hit the solar sector back in June, and analysts certainly have lived up to these expectations. Still, more bearish attention could come First Solar, Inc.'s way, considering eight of 17 brokerage firms rate it a "strong buy," with no "sell" ratings on the books, while its average 12-month price target stands at $62.28 -- a steep 49.5% premium to current levels. 
SPWR is set to nosedive this morning, signaling a 29% drop in pre-market action -- putting it on track for a fresh three-year low. This pending sell-off comes after the solar company reported a larger-than-forecast second-quarter loss, issued a downbeat full-year outlook, and said it was reducing its workforce by 15%. On top of a number of price-target cuts, Credit Suisse joined J.P. Morgan Securities and Deutsche Bank in downgrading SPWR to the equivalent of a "hold" rating. Credit Suisse also added, "The guidance cuts are problematic in their own rights, but the bigger issue for the stock from here is management credibility and lack of apparent stability in the core business." At $14.78, SunPower Corporation has already lost over half its value in 2016, but -- as you may have guessed by now -- the vast majority of analysts maintain bullish outlooks. By the numbers, 13 of 15 brokerage firms have "buy" or better ratings on the stock, and none consider it a "sell."