Please ensure Javascript is enabled for purposes of website accessibility

Why Maxeon Solar Technologies Stock Just Crashed 12%

By Rich Smith – Oct 16, 2020 at 11:16AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Blame Goldman Sachs.

What happened

Shares of Maxeon Solar Technologies (MAXN 5.61%) have had their share of ups and downs -- but mostly downs -- since the company's widely publicized spinoff from parent company SunPower in late August.

On spinoff day, Maxeon shares closed at $19, but by late September, they had lost more than a third of their value. As recently as Monday, Maxeon appeared to be back on an uptrend, and was approaching $22 a share -- but today, it no longer looks like the stock is going to get there after all.

Maxeon stock is down 12.2% as of 11 a.m. EDT -- and Goldman Sachs is to blame.

Cartoon characters confused by stock chart arrow falling and crashing into floor

Image source: Getty Images.

So what

The famed investment banker downgraded shares of Maxeon Solar from neutral to sell last night, and slapped a price target of only $15 on the stock -- well below what Maxeon stock sold for immediately following its spinoff, and approaching the lowest price the stock has fetched in the last two months.  

Although Goldman Sachs remains positive on the solar industry in general, both "in the U.S. and abroad," notes StreetInsider.com, the analyst has "margin/pricing/FCF concerns" regarding individual players within the solar industry, and regarding Maxeon in particular.

Now what

Goldman notes that one of its biggest concerns is Maxeon's Hemlock Semiconductor business, which depends largely on Chinese solar companies' demand for its product, and which has been hurt by tariffs China imposed on polysilicon imports during the U.S.-China trade war. Goldman also cites weak prices resulting from what analysts call "massive government subsidies" for its own polysilicon suppliers.  

Goldman is recommending investors sidestep these concerns and buy shares of thin-film solar specialist First Solar or the more profitable Canadian Solar instead.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Maxeon Solar Technologies, Ltd. Stock Quote
Maxeon Solar Technologies, Ltd.
MAXN
$26.15 (5.61%) $1.39
First Solar, Inc. Stock Quote
First Solar, Inc.
FSLR
$144.23 (5.57%) $7.61
SunPower Corporation Stock Quote
SunPower Corporation
SPWR
$24.92 (6.13%) $1.44
Canadian Solar Inc. Stock Quote
Canadian Solar Inc.
CSIQ
$39.22 (3.48%) $1.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.