Credit Suisse Downgrades SunPower (SPWR) to Neutral; Unexpected Guidance Cut 'Disconcerting'
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Credit Suisse downgraded SunPower (NASDAQ: SPWR) from Outperform to Neutral with a price target of $12.00 (from $32.00) as guidance slashed.
Analyst P. Jobin commented, ": We are downgrading SPWR from Outperform to Neutral and lowering our Target Price from $32 to $12; our estimates are cut to $0.36/$0.73/$0.69 from $1.15/$1.55/$1.64 for 2016/17/18 respectively. The company reduced 2H16 guidance ~40% and provided 2017 guidance well below investor expectations (54% below prior analyst day targets). The 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. There are a lot of moving parts to the realigned SunPower that will require strong execution in the coming quarters, and with the stock down 30% after hours it is clear to us that management needs to start by repairing its reputation. We believe in the long-term secular growth story underpinning the renewable space, and management's typically conservative approach, but find the unexpected guidance cut - attributed to factors that should have been apparent many months ago - to be disconcerting."
Shares of SunPower closed at $14.78 yesterday.
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