Why SunPower Corporation Shares Will Rise Above $40

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of SunPower Corporation (NASDAQ: SPWR  ) gained 8% in premarket trading Wednesday after Bank of America upgraded the solar products specialist from underperform to buy.

So what: Along with the two-notch upgrade, analyst Krish Sankar boosted his price target to $37 (from $21), representing about 34% worth of upside to yesterday's close. So while momentum traders might be turned off by SunPower's price weakness in recent months, Sankar's call could reflect a growing sense on Wall Street that its prospects are becoming too cheap to pass up.

Now what: According to B of A, SunPower's risk/reward trade-off is particularly attractive at this point. "The company offers the industry's highest efficiency panel, has exposure to key growth markets globally, and is backed by global energy giant Total," said Sankar. "In addition to utility-scale project opportunities, the company's US-based rooftop leasing business holds long-term value. We see substantial opportunity for the company to leverage high efficiency technology and low-cost Total-backed financing to expand contracted project opportunities around the world." So while SunPower remains just too volatile and speculative for average investors, less risk-averse Fools might want to take a closer look. 

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  • Report this Comment On April 23, 2014, at 10:49 AM, jargonific wrote:

    Google teamed up with Sunpower 4/23/14.

    Should they buy Total's interest in Sunpower? If they don't will Google potentially gain from their billion dollar investment in alternative energy?

    Lots of hope in their decision. Holding SPWR for all might..

  • Report this Comment On April 23, 2014, at 4:42 PM, jwmphotog wrote:

    I own it, and am happy about the increase. I also shared your review on my blog. Was wondering, is that a "Shooting Star" now? I bought at 31 and suffered quite a blow the last couple weeks. I just don't want to go back to those levels again.

  • Report this Comment On April 25, 2014, at 1:43 PM, markitekt wrote:

    I bought in, in October last year when we purchased a system for our home. Now I can watch the meter spin backwards and the profits flowing in. Great products, great company, great vision. They definitely have a huge edge on the competition. Once their new plant is online, the sky's the limit!

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Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

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8/28/2015 4:00 PM
SPWR $24.32 Up +0.45 +1.89%
SunPower Corporati… CAPS Rating: ****