SunPower (SPWR) - Get SunPower Corporation Report shares soared Wednesday after Piper Sandler analyst Kashy Harrison began coverage of the solar power component seller with an overweight rating and a $20 share-price target.
The average analyst target price is $11.86, according to Bloomberg.
Harrison rated SunPower a “favorite idea.” The company is on a “path toward generating positive operating cash flow nearer-term, generating FCF [free cash flow] longer-term, and decreasing net recourse debt to less than zero, while reducing its reliance on capital markets,” he said.
SunPower traded at $17.78, up 13.9%, and has skyrocketed 248% so far this year.
Solar shares in general are rising on enthusiasm for a potential victory by Joe Biden, who favors renewable energy. The industry has “significant growth opportunities ahead,” Harrison said. Residential solar has only taken 3% to 4% of the addressable market, leaving plenty of room for expansion, he said.
Last month, SunPower announced financial guidance for the fourth quarter and the full year, reflecting the recently completed spinoff of Maxeon Solar Technologies.
For the fourth quarter, the company expects GAAP revenue of $330 to $370 million, GAAP net income of zero to $10 million, adjusted EBITDA of $20 million to $30 million, and megawatts (MW) recognized in the range of 150 MW to 170 MW.
For full year 2020, the company expects GAAP revenue of $1.06 billion to $1.10 billion, GAAP net income of $30 million to $40 million, adjusted EBITDA of $20 million to $30 million and MW recognized in the range of 465 MW to 510 MW.