"SunPower Shares Have Potential to Double Following Recent Selloff, According to Raymond James"

SunPower Upgraded to Strong Buy by Raymond James

Analyst Upgrades SunPower Amidst Weakness

Raymond James analyst Pavel Molchanov has upgraded solar energy company SunPower to a strong buy, stating that concerns over the firm's reliance on California are unfounded. Despite California accounting for half of SunPower's customer additions in 2022, the analyst believes that the company's exposure to the state will not hinder its growth in 2023. SunPower has already guided to 90,000-110,000 incremental customers for the year, up 20% from the previous year. Even if the increase falls short at 10%, it would still outperform the overall U.S. market.

New Policies and Resilient Power Grid

The recent selloff of SunPower shares can be attributed to the firm's exposure to California and the implementation of net metering policy NEM 3.0. While critics argue that this policy lowers overall savings for residential solar, it was designed to create a more resilient power grid. However, the analyst points out that the adoption of rooftop solar in the U.S. is significantly behind other countries such as Germany and Australia. This suggests that there is further potential for growth in the residential solar market.

Continued Customer Growth and Adaptability

SunPower has demonstrated its ability to add customers and diversify its business, indicating successful adaptability and a national footprint. The analyst believes that ahead of any adverse policy changes, there is always a demand pull-in, followed by a temporary decline before growth resumes from a lower baseline. This pattern is seen in California as well, presenting a buying opportunity for SunPower shares amidst the recent underperformance. Raymond James has set a price target of $21 for SunPower, reflecting a more than 120% increase from the current share price.

Conclusion: A "Hot Take" on SunPower's Upgrade and Its Impact on a New Business

Disregarding Concerns and Capitalizing on Growth Potential

The recent strong buy upgrade of SunPower by Raymond James highlights the optimism surrounding the solar energy company, dispelling concerns about its heavy reliance on the California market. This development presents an intriguing opportunity for new businesses looking to enter the renewable energy sector.

Lessons from SunPower's Ability to Adapt

SunPower's success in adding customers and diversifying its business demonstrates its adaptability and resilience. These traits are crucial for any new business seeking to navigate an evolving industry. By closely studying SunPower's strategies and approaches, new players can learn valuable lessons on how to position themselves for growth and competitiveness in the renewable energy market.

Exploiting the Untapped Residential Solar Market

While critics argue that recent policy changes may impact SunPower's savings for residential solar, the slower adoption rate of rooftop solar in the U.S. compared to other countries shows untapped growth potential. It presents an excellent opportunity for new businesses to enter the residential solar market and capture the growing demand for clean and sustainable energy solutions.

Preparing for Temporary Setbacks and Long-Term Upside

The analyst notes that adverse policy changes often lead to temporary declines in performance before growth resumes from a lower baseline. This pattern can serve as a valuable lesson for new businesses, emphasizing the need for resilience and a long-term perspective. By anticipating and preparing for potential setbacks, new players can position themselves to capitalize on future growth opportunities that arise. In conclusion, SunPower's upgraded status and its potential for continued growth suggest a promising environment for new businesses in the renewable energy sector. By studying SunPower's adaptability, exploring untapped markets, and preparing for temporary setbacks, new players can harness the momentum and carve out their place in the evolving landscape of clean energy. Article First Published at: https://www.cnbc.com/2023/07/12/sunpower-shares-can-more-than-double-after-recent-selloff-raymond-james-says.html