Shares of SunPower Corp. SPWR dropped 5.7% in afternoon trading Tuesday, after BofA Securities turned bearish, citing concerns over relative valuation and pricing pressures. Analyst Julien Dumoulin-Smith cut his rating to underperform from neutral and lowered his stock price target to $18 — 11.1% below current levels — from $22. The stock has outperformed its solar-power peers by a wide margin year to date, as it has slipped 3.0% while shares of SunRun Inc. RUN have sunk 28.2% and Sunnova Energy International Inc. NOVA have tumbled 26.4%. In comparison, the S&P 500 SPX has shed 23.9% this year. Dumoulin-Smith said that outperformance suggests risks associated with new net energy metering (NEM) policy by the California Public Utilities Commission (CPUC) and new homes exposure are “underappreciated” by investors. In addition, Dumoulin-Smith said he remains “confused” by SunPower’s panel sourcing strategy, “which dubiously sacrificed exclusivity for flexibility at the start of the year.” He noted that flexibility as so far not benefited the company.
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