Wall Street Whacks First Solar, Inc., SunPower Corporation

First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR) are continuing to struggle, following bearish initiations at JMP Securities

by Alex Eppstein

Published on Sep 8, 2016 at 9:53 AM

Solar stocks are feeling the heat today. Specifically, First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR) are trading lower following some negative attention on Wall Street. Below, we'll take a closer look at how one bearish analyst firm's decisions are weighing on FSLR and SPWR.

FSLR is down 2.4% at $37.55, after JMP Securities initiated coverage with an "underperform" opinion and a $32 price target. This puts the solar stock just a stone's throw from its nearly three-year low of $36.75, tagged last month.

Amid First Solar, Inc.'s technical struggles, options traders have grown bearish. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.19 ranks in the 81st percentile of its annual range. Option players aren't the only skeptics -- short interest exploded by 31.5% during the last two reporting periods, and now accounts for roughly one-fifth of FSLR's float.

Meanwhile, SPWR has dropped 1.8% to trade at $10.03, quickly approaching its late-August three-year low of $9.62. Weighing on the solar stock is JMP's "underperform" initiation, as well as a $6 price target -- territory not charted since early 2013.

Despite these woes, options traders have been buying to open calls over puts at a rapid-fire rate at the ISE, CBOE, and PHLX. SunPower Corporation's 10-day call/put volume ratio sits at a top-heavy 9.15, just 6 percentage points shy of an annual peak. However, with 28.5% of the stock's float sold short, it's likely some calls were purchased by short sellers hedging against a surprise rally in SPWR shares.

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