Auriga Maintains Rating, PT On SPWRA

Auriga is maintaining its Sell rating and $13 price target on SunPower Corp. SPWRA based on a newly formed partnership with Total S.A. TOT. Says Auriga, “We maintain our Sell rating and $13 target on shares of SunPower (SPWRA) after the Total (TOT, NR) tender offer was announced Thursday afternoon, yet another arrangement where SPWRA was forced to bring in outside help to continue its business. While we agree that a partnership with Total should lead to lower debt cost and a larger sales channel, we prefer to wait for evidence of that larger sales channel before adjusting our model as it is unclear whether this benefits SPWRA in 2012 or later. The core issue for SPWRA is a lagging cost structure, and this arrangement will not fix that issue any sooner than we had previously expected.” SPWRA closed at $16.12 and TOT at $63.80 yesterday.