Bachman: “We Remain Adamant Sellers of SunPower”
Oct 23, 2009
Author: SCP Editor
October 23, 2009 – Analyst Comments – Pacific Crest’s Mark Bachman reiterated his UNDERPERFORM rating on SunPower (Nasdaq:SPWRA) and sees downside for the stock to $20, on the heels of the company’s earnings report this week. He states “we remain adamant sellers of SPWRA.”
Key Takeaways
· On the surface, Q3 looks impressive, but the quality of the earnings is not (gross margins down 31% Y/Y). Gross margins continue to decline amidst more uncertainty about declining module prices.
· Keeping 2010 revenue targets unchanged at $1.65 billion (FY09E is $1.45 billion), lowering components business margin assumption and lowering 2010 EPS estimate to $1.31 per share (from $1.35), while his FY09 EPS estimate is $1.15.
· “We believe the stock is worth $20, which is 15x our 2010 EPS estimate of $1.31.”
