Analyst: Mind Lack of Long-Term Attraction for Solar Stock

SunPower stock is down nearly 50% this year

Deputy Editor
Jul 11, 2023 at 9:28 AM
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The shares of SunPower Corporation (NASDAQ:SPWR) are 0.9% lower at $9.27 in premarket trading, after a bear note from Deutsche Bank. The firm put a "Catalyst Call: Sell" on the solar power company, keeping its "hold" rating while calling the stock a short-term investment idea.  

Coming into today, the majority of analysts shared a similar sentiment, with 16 rating SPWR a tepid "hold." In addition, four covering brokerages said "buy" or better, while two recommend a "strong sell." However, SunPower stock's 12-month consensus price target of $15.05 is a 62.4% premium to last night's close, meaning more price-target cuts could be coming.

A bearish approach seems prudent, as SPWR has already lost 44.4% over the last six months. As a result, the stock is now down nearly 50% in 2023, with pressure present from all major short- and long-term moving averages.

Options traders should keep an eye on things, as they've been unusually bullish over the last 10 weeks. This is according to the equity's 50-day call/put volume ratio of 6.97 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all other readings in its annual range.

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 15th 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 88 (out of a possible 100), implying the shares tend to outperform said volatility expectations. 

 

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