Analyst Downgrades: Chesapeake Energy Corporation, Sunrun Inc, and SunPower Corporation

Analysts downwardly revised their ratings and price targets on Chesapeake Energy Corporation (CHK), Sunrun Inc (RUN), and SunPower Corporation (SPWR)

Jan 5, 2016 at 9:58 AM
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Analysts are weighing in on oil and gas concern Chesapeake Energy Corporation (NYSE:CHK), and solar energy providers Sunrun Inc (NASDAQ:RUN) and SunPower Corporation (NASDAQ:SPWR)Here's a quick roundup of today's bearish brokerage notes on CHK, RUN, and SPWR.

  • Citigroup took an axe to energy stocks this morning, slashing its price target on CHK -- alongside about a dozen sector peers -- to $5 from $9. Wunderlich Securities also cut its price target on Chesapeake Energy Corporation, to $7 from $13. The stock has been floundering with crude oil for the past 18 months, giving up nearly 90% of its value since its June 2014 high, and hitting a 15-year low of $3.56 in December. Unsurprisingly, only two of the 19 brokerages providing coverage rate CHK better than a "hold," and short interest is elevated, accounting for more than 42% of the stock's total available float, or 9.5 days' worth of buying power, at typical volumes. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), option traders have made their pessimism clear, as well, as the security sports a 50-day put/call volume ratio of 1.60 -- higher than four-fifths of comparable readings from the last year. CHK was last seen 1.4% lower at $4.88.
  • RUN is down 5.4% at $10.61, after Goldman Sachs downgraded the stock to "neutral" from "buy," while weighing in on solar stocks across the board. Sunrun Inc is a relative newcomer to the market, trading publicly for the first time in August. Analysts have been mostly optimistic, with Goldman Sachs the only brokerage currently giving the stock anything other than a "buy" rating. But short interest on the equity has surged 85% over the last two reporting periods, and now makes up 14% of the stock's available float. At RUN's average daily pace, it would take about two weeks to cover all those bearish positions.
  • SPWR is also lower this morning, dropping 1.5% to $29.91,after Goldman Sachs cut its rating to "neutral" from "buy," but raised its price target by $2 to $35. However, Raymond James and Oppenheimer also gave SunPower Corporation modest price-target hikes, to $35 and $40, respectively. The shares have been tapping a series of lower highs and lows since 2014, but most analysts still appear optimistic, as 10 out of 13 maintain "buy" ratings, without a "sell" on the books. Option traders seem to agree -- the stock has a 50-day call/put volume ratio of 2.33 on the ISE, CBOE, and PHLX, higher than 82% of all readings from the past year. Still, short interest on SPWR stands at an elevated 16.4% of its total available float, meaning plenty of buying power is sitting on the sidelines.

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