SunPower Faces Analyst Downgrades Ahead of Solar Incentive Cuts
SunPower shares plunge on Morgan Stanley downgrade
SunPower, a solar energy company, experienced a nearly 9% premarket drop in its shares on Tuesday. This came after both Citi and Morgan Stanley downgraded the company’s ratings. The downgrades were prompted by California regulators’ expected decision to reduce rooftop solar panel incentives for apartments, schools, and farms. The California Public Utilities Commission delayed the vote on this decision until November 2. Citi downgraded SunPower to Sell/High Risk from a neutral rating and slashed its price target by over half. Morgan Stanley also downgraded SunPower to Underweight from Equalweight and significantly reduced the price target. Both banks expressed concerns about diminishing demand and a lagging California recovery for SunPower.
BJ’s Wholesale cut to Neutral at Goldman Sachs
Goldman Sachs downgraded BJ’s Wholesale Club to Neutral from Buy and lowered its price target. The analysts cited limited potential for earnings surpassing consensus estimates for fiscal 2024. While BJ’s club model shows promise for long-term unit growth, Goldman Sachs sees more appealing earnings growth opportunities in other sectors.
DXC Technology cut to Underperform
DXC Technology saw its shares plummet in premarket trading after Wolfe Research downgraded the company to Underperform. The analysts expressed concerns about the company’s ability to increase revenue growth due to challenges in the IT services sector. Despite being constructive on DXC’s GBS business, Wolfe Research highlighted structural challenges in GIS, Modern Workplace, and Cloud/ITO.
Two more downgrades
BofA Securities downgraded WEC Energy Group to Neutral from Buy and reduced its price target. Kosmos Energy also faced a downgrade from Bernstein, which lowered the company’s rating to Market Perform from Outperform and cut its price target. The downgrades reflect concerns about the companies’ performance and potential future growth.
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