Shares of solar manufacturer SunPower Corporation (NASDAQ:SPWR) jumped as much as 24.6% in trading Tuesday after getting an upgrade from Wall Street. Shares were hitting their daily high at 12:30 p.m. EDT.
Analyst Brian Lee at Goldman Sachs upgraded SunPower's stock from neutral to a buy rating and increased his price target from $6 to $11 per share. He said there are volume tailwinds that will drive growth, such as a solar mandate on new homes in California and people installing solar ahead of declining federal tax credits next year.
The upgrade coincides with a report from the SEIA and Wood Mackenzie that says the U.S. installed 2.7 gigawatts (GW) of solar in the first quarter, the most ever in the first three months of the year. Analysts at Wood Mackenzie are also increasing expected installations this year by 1.2 GW.
I wouldn't read much into the upgrade from Goldman Sachs because the sentiment of Wall Street regarding solar energy can rise and fall. The more important data point is a record quarter for solar in the U.S. and a very bullish sentiment long term. If installations rise, particularly in residential markets, SunPower will be one of the biggest beneficiaries. That's a reason to own the stock long term, and it's why I'm still bullish on this leading solar stock.