SUNPOWER CORPORATION: Bank of America Downgrades Shares to Underperform

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Sunpower Corporation Intrinsic Value – SUNPOWER ($NASDAQ:SPWR): SunPower Corporation is a publicly traded energy company headquartered in San Jose, California that designs, manufactures, and sells solar panels and solar cells. Bank of America downgraded SunPower’s stock to Underperform from Neutral with an $18 price target on Tuesday, citing “underappreciated risks that panel constraints outside MAXN channels impact revenue recognition in 2H22 exacerbating the company’s challenged history of execution.” The bank is concerned that with rapidly degrading new home data points, NEM 3.0 transition challenges, and structural changes to the business, SunPower’s upside is limited.

SunPower is also facing increased competition from Chinese solar manufacturers who are able to produce panels at a lower cost. In response to the concerns raised by Bank of America, SunPower issued a statement saying that it “disagrees with the investment thesis put forth” and that it is “confident in its strategy and ability to execute.”

Price History

On Tuesday, shares of SunPower Corporation opened at $19.20 and closed at $20.30, representing a 5.4% drop from the prior day’s closing price of $21.50. The stock’s decline came after Bank of America Merrill Lynch downgraded the company’s shares to “underperform” from “neutral,” citing concerns about SunPower’s competitive position and execution risks. In particular, the analyst expressed concerns about SunPower’s “ability to compete against a backdrop of intensifying competition and significantly lower solar industry capex.” The analyst also noted that SunPower’s share price has outperformed its peers in recent months, and that the company’s valuation is now “less attractive.”

VI Analysis – Sunpower Corporation Intrinsic Value Calculator

The company’s fundamentals are a key reflection of its long-term potential, and the below analysis of SUNPOWER CORPORATION’s fundamentals has been made simple by the VI app. The intrinsic value of a SUNPOWER CORPORATION share is around $20.1, as calculated by VI Line. The current price of the stock is $20.3, which is slightly overvalued by 1%.

Summary

Bank of America has downgraded shares of Sunpower Corporation from a “neutral” rating to an “underperform” rating. This downgrade comes as the stock price of Sunpower Corporation has moved down the same day. Sunpower Corporation is a leading solar power company that designs, manufactures and sells high-performance solar cells and solar panels based on a unique technology platform. The company has a strong presence in the residential, commercial and utility solar power markets.

Despite its strong market position, Bank of America believes that the company faces significant headwinds in the form of intensifying competition, declining government subsidies and tariffs on imported solar panels. These factors are likely to pressure the company’s margins and earnings in the coming years.