SunPower Stock Extends Gains on Bevy of Bull Notes

There's ample room for a shift in sentiment toward SPWR

Deputy Editor
Apr 5, 2022 at 9:52 AM
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The shares of SunPower Corporation (NASDAQ:SPWR) are up 2.1% at $24.57 this morning, after Raymond James hiked its price target on the solar energy name to $26 from $23. This move is in line with recent brokerage activity, as Bank of America yesterday upgraded the stock to "neutral" from "underperform," and raised its price target to $23 from $13, while J.P. Morgan upped its price objective to $21 from $20. These moves came after SunPower held its analyst day on March 31, which was called "more encouraging than expected" by Bank of America.

These bull notes sent SPWR to a 12.3% win on Monday, marking its best day in weeks. The pop also helped SPWR overcome pressure at the $22 level to notch its highest close since early December. The equity now boasts a 17.8% year-to-date lead.

There's plenty of room for covering analysts to revise their ratings and/or increase their price targets on SunPower stock. Coming into today, 10 of the 12 brokerages still recommended a tepid "hold" or worse, while just two said "buy" or better. Meanwhile, SPWR's 12-month consensus price target of $21.62 was a 10.1% discount to last night's close.

The equity could also benefit from a short squeeze. Short interest added 21.% in the two most recent reporting periods, and the 15.92 million shares sold short account for 20% of the stock's available float -- nearly a week's worth of pent-up buying power. 

That being said, it might be the ideal time to speculate on the stock's next move with options. SPWR's Schaeffer's Volatility Index (SVI) of 63% sits in the low 17th percentile of its 12-month range. In other words, options traders are pricing in relatively low volatility expectations right now. What's more, the stock boasts a Schaeffer's Volatility Scorecard (SVS) of 92 (out of a possible 100), implying the shares tend to outperform said volatility expectations. 

 

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