SunPower Corporation SPWR 2.18% shares plunged more than 18 percent Wednesday after the company reported a second-quarter earnings beat but lowered its guidance for the remainder of 2017. While investors are certainly disappointed by the big drop, Oppenheimer analyst Colin Rusch sees it as a buying opportunity.
According to Rusch, the guidance cut was simply due to the company adjusting the time frame on certain projects in Mexico in an attempt to capture more margin. SunPower’s steadily improving gross margins were the primary driver behind Oppenheimer’s February upgrade of SunPower to Outperform, Rusch said.
Despite the guidance cut, SunPower management maintains its projection for positive operating cash flow.
In addition, the company once again expressed interest in joining partner First Solar, Inc. FSLR 1.07% in selling 8Point3 Energy Partners LP CAFD 0.21%.
“Given strong demand for solar projects, we would not be surprised to see SPWR and FSLR complete a sale of CAFD In 2H17,” Rusch wrote. “We believe using proceeds to reduce debt would serve as a positive catalyst for shares.”
The company is also reportedly working on contingency plans should President Donald Trump exercise his Section 201 powers to impose new import duties on crystalline silicon solar modules. Rusch expects SunPower should be able to clear any supply chain hurdles that may come out of Washington.
Looking ahead, Rusch said…
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