Pacific Crest’s Mark Bachman weighed in this morning on SunPower

Apr 20, 2009
Author: SCP Editor

April 20, 2009 – Analyst Comments – Pacific Crest’s Mark Bachman weighed in this morning on SunPower (Nasdaq:SPWRA) with a headline reading “Cover Your Short Positions; Upgrading to Sector Perform”. Bachman doesn’t have a price target on the stock.


Key Takeaways:


·         Bachman’s short these is largely played out, fundamentals approaching a bottom – covering into the Q1 earnings call is “prudent”

·         Q1 and Q2 results likely to miss, 2009 guidance likely revised to low end – but Bachman isn’t sure this is going to be bad for the stock price. Current FY09 revenue guidance is for revenue in a range of $1.6 to $2 billion and EPS of $2.2 to $2.8 billion.

·         Bachman’s contacts suggest that there is possibly 2GW worth of excess modules on the market with prices approaching €2.00/watt and a prominent Chinese manufacturer is offering significant quantities at €1.80/watt. HOWEVER, Bachman said Industry fundamentals likely to get better, not worse: industry is entering seasonally strong period and the financing environment is improving.

·         No target price on stock, but thinks it could trade between $23 and $39 with a media value of $31 based on pro forma estimates (based on 2010 estimates). On the other hand, if 2009 estimates are used downside could be $16.29.


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