With the solar industry under pressure from falling subsidies, increasing competition and energy policy changes in Italy, Baird analyst J. Michael Horwitz Jr. downgraded SunPower (NASDAQ:SPWRA) from "Outperform" to "Neutral."
Falling solar module prices will probably result in the entire solar industry struggling for some time.
Horwitz said concerning Sunpower that the policy changes and oversupply will more than likely hold down the share price of the company over the short term. He lowered his price target on the solar company to $19.
In Horwitz' opinion Sunpower will have to lower its manufacturing costs in order to sustain margins at its current level.
He sees the recent $1.3 billion investment by Total in Sunpower as helping them to maintain a strong balance sheet at this time.
Goldman Sachs (NYSE:GS) recently stated they prefer First Solar (NASDAQ:FSLR) over Sunpower at this time, advising clients to sells their shares in Sunpower. Goldman sees the balance sheet of First Solar as much healthier than Sunpower. They don't see Sunpower as being able to make the required cuts in costs to maintain margins.
Goldman has a mixed outlook on the solar industry going forward, seeing it being weak for the next year or so on shrinking subsidies and tariffs being cut.
They reiterated a "Buy" rating on Trina Solar (NYSE:TSL) Friday, and boosted their rating on JinkoSolar Holding (NYSE:JKS) from "Sell" to "Buy." On ReneSola (NYSE:SOL) Goldman lowered its rating from "Neutral" to "Sell." They also downgraded the rating of Yingli Green Energy from "Neutral" to "Sell."
SunPower was trading at $19.69, falling $0.17, or 0.86 percent, as of 10:54 EDT. Trina Solar was at $20.08, down $0.43, or 2.10 percent. First Solar was at $129.25, dropping $3.35, or 2.53 percent. JinkoSolar was trading at $25.07, declining $0.52, or 2.03 percent. Renesola was at $4.64, falling $0.13, or 2.73 percent.
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