UBS Downgrades SunPower (SPWR) to Neutral; Unable to Offset Extremely Challenging Macro
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UBS downgraded SunPower (NASDAQ: SPWR) from Buy to Neutral with a price target of $7.00 (from $13.00).
Analyst Julien Dumoulin-Smith commented, "We are downgrading SPWR from Buy to Neutral and reducing our PT from $13 to $7. Despite our initial thesis that shares were close to a near-trough valuation, multiple guidance revisions in the space of several months and extremely challenging macro environment have demonstrated that even the highest quality product in a commodity space is still subject to the same pressures, regardless of temporary offsets like legacy projects and restructuring actions. With growth still projected off depressed 2016 EBITDA, we don’t necessarily think we're d/g at the bottom if DG margins could still deteriorate, suggesting downside to limited equity if flattish off '16 (particularly ex-Henrietta). We worry that lower panel prices could still have a knock on effect on ability to sell at SPWR's historically premium prices, albeit could prove a margin tailwind today."
Shares of SunPower closed at $6.32 yesterday.
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