J.P. Morgan analyst Christopher Blansett this morning resumed coverage of SunPower (SPWRA), reducing his rating on the shares to Underweight from Neutral, with a new price target of $16, down from $25. Blansett had suspended coverage of the stock while Morgan’s bankers were participating in the company’s recent acquisition of SunRay. He notes that the downgrade follows completion of that deal, and is consistent with his recent downgrade of a variety of other solar stocks in March. Blansett continues to think that the solar industry is headed for a period of excess supply and lower prices.
“While SunPower is less exposed to Germany where we see most risk than many of its peers, we believe intensifying pricing pressure later this year, coupled with a continued degradation in margin leverage and relatively expensive valuation based on our estimates, positions SPWRA to underperform” versus other alternative energy stocks, he writes.
SPWRA today is down 37 cents, or 1.9%, to $18.71.
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