SunPower's dismal outlook drags down Enphase, SolarEdge
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Enphase Energy (ENPH) and SolarEdge Technologies (SEDG) are two of Wednesday's biggest losers on the S&P 500, -3.4% and -5.8% respectively, after peer SunPower (NASDAQ:SPWR) provided disappointing preliminary Q2 results and weaker than expected full-year guidance.
J.P. Morgan analyst Mark Strouse maintained his Underweight rating on SunPower (SPWR) and cut his stock price target to $10 from $13, and said concerns about the outlook for U.S. residential solar installations weighed on the entire sector (NYSEARCA:TAN).
SunPower's (SPWR) announcement could reflect the company's "relatively higher mix of cash/loan purchased installations, and perhaps SPWR's ability to transition towards lease/PPA installations, which we believe are gaining share in the overall U.S. residential solar market," Strouse wrote.
The stock trades at ~30x estimated FY 2023 EV/EBITDA, a premium to peers which is unjustified owing to relatively mixed execution and above-average exposure to California NEM changes, Strouse said.
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Stock price return: Down 34.5% YTD, down 41% in the past 12 months