Clean Renewable Energy
Solar Company Buy Recommendation
September 23 2019 - SunPower, IBD Stock Of The Day, Shines Bright In Hot Market By Investors Business Daily
SunPower (SPWR) is the IBD Stock Of The Day, as the maker of solar panels is getting positive rays in a hot market. SunPower stock jumped above its 50-day moving average on Monday and is up 18% this week.
On Aug. 1, SunPower stock soared 24%, following its second-quarter earnings report that beat on revenue but fell short on earnings per share. The company raised earnings guidance for this year.
Following the earnings report, Angelo Zino, analyst at CFRA Research, raised his price target on SunPower stock to 18, from 12.
"We see greater penetration for SunPower's solar-plus-storage solutions in the residential space, an area where we think the company has a competitive advantage," Zino wrote in a note to clients at the time. "We think SunPower is now positioned to see sustainable profitability as we see upside to consensus margin expectations."
SunPower is in the seventh week of a cup base, with a buy point of 16.14.
On the stock market today, SunPower stock fell 2.6% to close at 14.70, as the overall market suddenly shifted downward. Negative sentiment was fueled by reports that a Chinese delegation, in the U.S. for trade talks, canceled a visit to farms in Montana.
SunPower Stock: Diverse Customer Base Founded in 1985, San Jose, Calif.-based SunPower makes silicon photovoltaic cells and solar panels. It designs, sells, installs and maintains solar systems in settings that range from home rooftops to large, utility-scale power plants. Its worldwide customer base spans residences, businesses, governments, schools and utilities.
The solar energy group ranks No. 2 among IBD's 197 industries, based on a six-month relative price performance.
The IBD Stock Checkup Tool shows that SunPower has a relatively weak IBD Composite Rating of 59 out of 99. But its Relative Strength Rating is a best possible 99, which reflects strong stock market performance.
The stock's relative strength line is near a record high. The relative strength line compares a stock's price action with that of the S&P 500. A rising line tells you the stock is outperforming the benchmark index. A falling RS line means the stock is lagging.
Solar Industry Stock Leaders The leading stock in the IBD Energy-Solar industry group is Leaderboard name SolarEdge Technologies (SEDG), followed by Daqo New Energy (DQ), then JinkoSolar (JKS) and Enphase Energy (ENPH). SunPower is No. 8 on the list. SunPower has a 7% stake in Enphase, which was a recent IBD Stock Of The Day.
Other solar industry companies include First Solar (FSLR), Sunrun (RUN) and Vivint Solar (VSLR). First Solar is another breakout candidate as it works on a base with a 69.33 buy point.
SunPower last turned a profit in the fourth quarter of 2017, but sees an earnings jump of 156%, to 19 cents per share, in 2020.
Oppenheimer analyst Colin Rusch, following SunPower's second-quarter results, said the company continues to make steady progress on its revised business plan. But Rusch maintained a cautious stance on the company.
"While the company is executing well and plans to generate sufficient cash to end the year at $200 million-plus, we continue to be challenged in seeing SunPower generate cash consistently over the next few years as competition intensifies and the company migrates into the energy services business," Rusch wrote in a note to clients.
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