SunPower (SPWR) — I last covered this large-cap solar company on July 24, noting that it is expected to benefit from 19%-35% anti-subsidy tariffs imposed on Chinese solar manufacturers by the U.S. Department of Commerce (DOC). On Tuesday, Zacks reported the DOC upheld a complaint that China’s sale of solar panels to the U.S. was illegal because they were priced below their cost of production.
Additionally, in late June, SunPower announced a pilot program with KB Home (KBH) to install “innovative energy storage solutions at certain KB Home locations in California.” Its solar power systems are currently offered to new homes buyers in more than 150 KB Home communities.
Consensus earnings estimates for 2014 are up $0.02 to $1.30 per share since my last report. And 2015 estimates are up $0.08 to $1.72 per share.
On June 25, I said SPWR had broken from a well-defined head-and-shoulders bottom, supported by high volume at key technical points of the formation. The target for the breakout was $43, but I noted that shares were somewhat overbought and recommended limit orders be entered at $36.50. The stock dropped to a low of $32.54 on Aug, 6, so readers should now own shares.
During Tuesday trade, SPWR broke from a wedge and rose above its 50-day moving average, now at $37.60. A close above this price should provide additional momentum to hit a revised trading target of $45.
