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Why SunPower Stock Fell in July and Continued Falling in August

By Rekha Khandelwal – Aug 5, 2021 at 8:41AM

Key Points

  • An analyst rating likely hurt SunPower stock in July.
  • Solar stocks broadly have seen some correction this year after significant gains in 2020.
  • SunPower's second-quarter revenue was toward the lower end of its guidance range.

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The stock fell harder than its peers last month.

What happened

SunPower (SPWR 3.64%) stock fell 15.2% in July, according to data provided by S&P Global Market Intelligence. The stock continued its fall this month and was already down 7% by Aug. 4. SunPower stock fell 9% on Wednesday, after the company announced lackluster second-quarter results.

So what

SunPower stock's fall in July is likely attributed to an underperform rating by Credit Suisse. On July 13, Credit Suisse analyst Maheep Mandloi assigned an underperform rating to SunPower stock. He also gave a price target of $22 for the stock. The next day, the stock fell 14.6%. Moreover, on July 15, Piper Sandler analyst Kashy Harrison lowered his price target for SunPower from $28 to $26. 

Person cleaning a solar panel.

Image source: Getty Images.

Solar stocks broadly have seen some correction this year. In July, the Invesco Solar ETF fell 4.1%. Analysts' downbeat sentiments for SunPower likely added to its steeper fall. Additionally, SunPower stock soared steeply in 2020 and in January this year, outperforming peers like Sunrun and Sunnova Energy Inernational. The share price rose above $54 in January.

SPWR Chart

SPWR data by YCharts

So, the fall in the last six months reflects some profit taking by investors who felt the stock had run a bit too high.

Now what

SunPower's second-quarter revenue of $309 million fell short of consensus estimates and was toward the lower end of the company's guided range of $295 million to $345 million for the quarter.  SunPower also gave revenue guidance of $1.41 billion to $1.49 billion for fiscal year 2021, which was slightly lower than the company's previous guidance of over $1.5 billion in revenue for the year.

Management attributed the change to some of its commercial and industrial projects being pushed into 2022. Though that sounded reasonable, some investors decided not to wait that long and headed for the exits.

Rekha Khandelwal has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

SunPower Stock Quote
$24.49 (3.64%) $0.86
Credit Suisse Group Ag Stock Quote
Credit Suisse Group Ag
$3.38 (9.38%) $0.29
Invesco Solar ETF Stock Quote
Invesco Solar ETF
$83.76 (2.77%) $2.26
Sunrun Stock Quote
$32.15 (3.18%) $0.99
Sunnova Energy International Inc Stock Quote
Sunnova Energy International Inc
$22.59 (2.82%) $0.62

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

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