Barron's: SunPower (SPWR) Could Double
Tweet
Share
E-mailGet Alerts SPWR Hot Sheet
Join SI Premium – FREE
An article featured in this weekend's edition of Barron's suggested several investment ideas for a popular solar stock, SunPower Corp. (Nasdaq: SPWR). The article, entitled "Sunny Skies for Solar Stock", thoroughly analyzes SunPower on a valuation basis and comes to the conclusion that the stock could double in 2008, even if its earnings hit the low-end of the Street's expectations.
Shares of SunPower have fallen about 47% in January and Barron's calls the sell-off "overdone". With the stock currently trading at about 32x a FY08 EPS estimate of $2.07 and 20x a FY09 EPS estimate of $3.30, the article says valuations do not seem high considering the Company's expected EPS growth of 40-50% through 2010. If SunPower can deliver and meet the low-end of its growth expectations, the Company could be trading at about 40x and would be priced around $130.
One major concern the article discusses has to do with the expiration of the U.S. solar tax credit by the end of 2008. The tax credit allows companies to deduct 30% of the cost from solar systems and if it expires without being renewed, earnings could take a hit. Despite concerns, many analysts believe the tax credit will be extended by the end of 2008, however.
Shares of SunPower have risen more than 12% today, or about $8, and besides the positive Barron's article, are also benefiting from crude oil prices that have risen more than $2 today. SunPower' is currently trading near $74.
Shares of SunPower have fallen about 47% in January and Barron's calls the sell-off "overdone". With the stock currently trading at about 32x a FY08 EPS estimate of $2.07 and 20x a FY09 EPS estimate of $3.30, the article says valuations do not seem high considering the Company's expected EPS growth of 40-50% through 2010. If SunPower can deliver and meet the low-end of its growth expectations, the Company could be trading at about 40x and would be priced around $130.
One major concern the article discusses has to do with the expiration of the U.S. solar tax credit by the end of 2008. The tax credit allows companies to deduct 30% of the cost from solar systems and if it expires without being renewed, earnings could take a hit. Despite concerns, many analysts believe the tax credit will be extended by the end of 2008, however.
Shares of SunPower have risen more than 12% today, or about $8, and besides the positive Barron's article, are also benefiting from crude oil prices that have risen more than $2 today. SunPower' is currently trading near $74.
You May Also Be Interested In
- Bernstein sees over 50% upside in this Japanese chipmaker's stock
- Farm equipment maker seen topping forecasts as commodity trends improve
- Value-focused retailer sees traffic momentum strengthen ahead of second quarter
Create E-mail Alert Related Categories
Insiders' BlogSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
