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In the wake of its second-quarter earnings report, SunPower Corporation (NASDAQ: SPWRA) has garnered no fewer than four price-target increases and at least two upgrades. Running through the list, FBR upgraded the shares from "market perform" to "outperform," while Collins Stewart upped the equity from "sell" to "hold." FBR also hiked its price target from $22 to $40, while Citigroup upped its target from $15 to $18. Elsewhere, Credit Suisse raised the stock's price target from $20 to $32, and Canaccord Adams increased its 12-month estimate from $21 to $29.
In fact, Wedbush Morgan is the lone bearish holdout this morning, with the brokerage firm bucking the trend by downgrading SPWRA from "outperform" to "neutral."
Turning to the report that inspired this onslaught of brokerage notes, SunPower last night reported a second-quarter profit of $24.2 million, or 26 cents per share. Excluding items, earnings would have arrived at 24 cents per share, easily outpacing analysts' consensus estimate for a profit of 13 cents per share. Likewise, quarterly revenue of $297.6 million comfortably topped Wall Street's forecast for sales of $263 million.
SPWRA blazed higher out of the gate this morning on the strength of this report, with the day's bevy of bullish notes simply adding more fuel to the fire. At its intraday peak, the stock was up nearly 30% to trade above $32. Now, the shares are in position to challenge resistance at their 10-month moving average, which hasn't been toppled on a monthly closing basis since August 2008.
Short sellers are no doubt rushing to cover amid today's rally, and a short-squeeze situation could help the stock extend its burst of earnings-related momentum. Short interest on SPWRA jumped by nearly 12% during the past month, and it would take more than four days at the equity's average daily volume for all of these bearish bets to be repurchased.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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