Needham & Company Maintains an 'Underperform' on SunPower (SPWRA); Combination of Two Classes of Common Stock Could Trigger More Downward Pressure

September 13, 2011 8:21 AM EDT
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Price: $7.29 --0%

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Needham & Company maintains an 'Underperform' on SunPower (NASDAQ: SPWRA).

Needham analyst says, "SunPower announced a proposal to combine its Class A and Class B common stocks into a single stock. A shareholder vote is expected on November 15, 2011. The announcement did not come as a surprise, given that SunPower has previously voiced intentions to re-class to a single common stock. We expect the immediate reaction will lead to lower SPWRA stock price, since SPWRB is trading at a 19% discount. Longer-term, we believe a single class of common stock will allow for more transparent market valuation of SunPower. Based on factors including weaker industry fundamentals, increased competition in high-efficiency, aggressive consensus estimates, and lowered peer valuations, we maintain our Underperform rating."

For more ratings news on SunPower click here and for the rating history of SunPower click here.

Shares of SunPower closed at $11.98 yesterday.

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