SunPower Gets Downgraded and 3 Solar Stocks Trading Lower Today
Shares of SunPower Corp. (NASDAQ:SPWR) tripped over a downgrade on Monday morning and fell back below $8 per share. Analysts at Credit Agricole Securities downgraded the company from “Underperform” to “Sell” following an announcement that SunPower expects to take a much higher restructuring charge in the fourth-quarter than previously expected.
The charge is now expected to come in at between $33 million and $40 million, compared to previous estimates of between $10 million and $17 million. This was enough to pull the stock down as much as 9 percent in intra-day trading on Monday.
The stock shot up over 30 percent at the beginning of the year following the sale of two massive solar projects to a holding company owned by Warren Buffett’s Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB). But Credit Agricole analyst Mark Heller says that while the sale “adds to revenue visibility, we still don’t see meaningful upside to our forecast.”
First Solar’s (NASDAQ:FSLR) New-Year’s hangover continues on Monday, as the stock fell over 3 percent in early-afternoon trading. First Solar is one of the few solar companies that hasn’t seen its share price rocket since the beginning of 2013.
Today’s dip comes after the company announced the beginning of construction on a new solar plant in California. The new facility will create about 250 construction jobs near El Centro in Imperial County, and generate as much as $230 million for the local economy. The plan will be able to generate about 139 megawatts of power, enough to power about 50,000 homes. Construction should be completed by the end of the year.
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Just a few days after a number of analysts from various different banks opened coverage on the stock with “Outperform” or “Buy” ratings, shares of SolarCity (NASDAQ:SCTY) fell as much as 6 percent in a single day. Granted, that’s not uncommon for the solar-installation company that launched its IPO just last month.
The stock is up 32 percent since its IPO, but is down more than 10 percent over the past five trading days. Many industry observers are optimistic about the company’s business model — leasing and installing solar panels, not manufacturing them — but the company’s success in the market still seems uncertain. The company has trailing twelve-month earnings of -$1.10 per share, and analysts are expecting another loss this quarter.
After a tremendous 137 percent rally over the past three months, shares of Suntech Power Holdings (NYSE:STP) may have finally overheated. The stock, once in danger of being de-listed because it was trading below $1 per share for too long, has soared on news that China will increase its solar subsidies in 2013 and will become the world’s largest solar market.
China is looking to increase its current installations from 4 gigawatts to 10 gigawatts, giving Chinese companies like Suntech a domestic outlet for their business. This is particularly good news given tariffs that are going into effect in America and Europe to prevent solar-panel dumping.
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