After enjoying a pleasant pop in its share price at the end of 2023, solar company SunPower(NASDAQ: SPWR) is experiencing a dimmer 2024. Its share price cratered by 10% on Thursday after an analyst downgraded his rating on the stock. That decline was far steeper than the S&P 500 index's 0.3% dip for the session.
Yet another bearish take on SunPower
Well before the market opened, Raymond James Financial's Pavel Molchanov changed his recommendation on SunPower stock to market perform -- hold, in other words -- from his previous rating of outperform (buy).
That was only the latest in a series of bearish adjustments from analysts. In mid-December, for example, in a reset of its solar energy stock takes, Goldman Sachs downgraded SunPower from neutral to sell. Also, Piper Sandler's Kashy Harrison lowered his price target on the stock from $5 to $4, although he maintained his neutral rating.
Not coincidentally, these moves were made after SunPower issued an ominous "going concern" warning due to financing concerns. While the company escaped a default event with a creditor by signing a new amendment to its loan arrangement with that entity, its future remains in question.
A challenged stock in a tough industry
So Molchanov is not the only SunPower-watcher becoming more pessimistic about the company's future. Those financing concerns are serious, and despite many advances, the solar industry still isn't chock-full of companies booking profits on the regular. SunPower stock feels like it could be a falling-knife situation of the variety best avoided by investors.
Should you invest $1,000 in SunPower right now?
Before you buy stock in SunPower, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and SunPower wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of December 18, 2023
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.
