SunPower Stock Surges More Than 12 Pct. After Barron's Becomes Latest to Tout Potential Growth
NEW YORK (AP) -- Shares of SunPower Corp. surged Monday after a Barron's article became the latest in a string of reports to tout the company's growth potential and say its shares have been undervalued.
The solar-panel maker's stock rose $7.21, or 10.9 percent, to $73.58. Its shares have traded in a range of $38.82 to $164.49 over the past 52 weeks, reaching the high in November.
Solar stocks have come under pressure recently amid a broader sell-off because of recessionary fears and because of a solar-tax credit that is set to expire at the end of this year.
However, the Barron's article noted that analysts are forecasting earnings growth of 40 percent to 50 percent for SunPower through 2010 and that the company is working to cut costs and lift margins. If its profits expand to that degree and its operating strategy is successful, its shares could rally, Barron's said.
The article also noted that much of SunPower's revenue comes from customers who are spurred to install solar power because of state incentives, rather than the federal one that is set to expire.
Wall Street analysts like Calyon Securities' Kelly Dougherty have been issuing similar statements in recent weeks, saying the company is poised for growth despite a weak share price. Dougherty reiterated a "Buy" rating for SunPower on Jan. 28, but lowered her price target on the shares, saying investors are "not paying up as much for growth now."
