Monday, July 4, 2022
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Why SunPower stock just exploded


What happened

Shares of a solar energy company Sun Power (NASDAQ: SPWR) surged in Monday trading, up 10.5% at 1:10 p.m. ET.

you can thank Bank of America for this – and not just Bank of America.

Image source: Getty Images.

So what

In a note posted to this morning, Bank of America reportedly withdrew its sell rating from SunPower shares and upgraded the solar stock to neutral.

BofA explained that SunPower’s analyst day last week laid out “a robust turnaround plan with specific milestones” that suggest SunPower will benefit from a “substantial turnaround” in its business. SunPower really needs a turnaround. According to data from S&P Global Market Intelligence, it has lost money in three of the past five years and burned money in all of them.

Now what

Bank of America isn’t the only analyst to be increasingly positive about SunPower, either. Friday last week, the two cowen and RW Baird raised their price targets on the solar stock – to $20 and $24, respectively. Cowen particularly liked SunPower’s plan to expand its business into electricity storage, virtual power plants and electric vehicle charging, and Baird echoed that sentiment.

Investors betting on a SunPower turnaround should be on the lookout for improved revenue growth in these areas. At the same time, the investment bank Morgan Stanley warns that SunPower’s new growth initiatives may be “capital intensive” – ​​so better revenue may not translate to improved earnings.

For what it’s worth, Cowen and Morgan Stanley agree with Bank of America that — at least until we know more about the earnings picture — SunPower stock remains a hold — not a buy.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.

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