On Monday, Piper Sandler adjusted its price target for SunPower (NASDAQ:SPWR) shares, reducing it to $2.50 from the previous $3.00. The firm has maintained a Neutral rating on the stock. This revision follows the latest earnings call, leading to a recalibration of the company's gross margins (GMs) and operational expenditures (OpEx).
The analyst from Piper Sandler stated that the decision to lower the price target was based on a more precise alignment with the outcomes and guidance provided during SunPower's prior earnings discussion. The change reflects a more conservative estimate of the company's financial performance.
It was noted that the valuation method used by Piper Sandler, a 7-year Discounted Cash Flow (DCF) analysis, remains consistent with the prior assessment, as does the approximate 14% discount rate. The DCF is a valuation method used to estimate the value of an investment based on its expected future cash flows.
SunPower, a company specializing in solar energy solutions, has been under scrutiny by investors as the renewable energy sector experiences various market pressures. The revised price target suggests a more cautious outlook on the company's ability to generate profit in the near term.
The adjustment in SunPower's price target by Piper Sandler comes as analysts continuously monitor the renewable energy sector for growth potential and financial stability.
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