Lazard's Defense of SunPower (SPWR)

SunPower (NASDAQ: SPWR) posted a lackluster guidance after earnings this morning and this originally had most of the other key solar stocks trading much lower.  Most of these recovered handily in the morning and even SunPower recovered quite a bit off of lows.

Analyst Sanjay Shrestha of Lazard Capital Markets issued a note today whereby he called the weakness a buying opportunity and he is reiterating his BUY rating and has a price target of $185.00.  That is well over a 100% move from today’s prices if that were to come true.   

• Shrestha says, "…we note that the company tends to be conservative with its initial guidance, and the Systems business’ numbers are lumpy on a quarterly basis… The current price (19x 2009E EPS of $3.35) represents a compelling entry point, in our view. Even a 20x multiple on 2010E EPS of $5.35, discounting back at 15%, would equate to a $95-$100 share price, well above the current level…. Our $185 price target reflects a 40x (a premium to the solar group’s 2009E multiple of 20x) multiple on our 2010E EPS of $5.35, discounted at 15% for one year."

Shares traded almost as low as $60.00 at one point this morning, but this traded back up to $69.21 at the close and the lack of bad earnings news from other companies has this one up another 3% at $71.30 in after-hours trading.  If you think today was volatile, its 52-week trading range is $38.82 to $164.49.

Jon C. Ogg
January 24, 2008