SunPower new lease, PPA project halt ‘an indefinite suspension,’ says JPMorgan

JPMorgan confirmed with SunPower (SPWR) that the company sent a letter to its dealers that, effective July 17, the company will no longer support new lease or PPA project installations, stating that the firm does not believe this is a temporary halt, but rather “an indefinite suspension” of SunPower’s future dealings. The firm further believes the news is primarily company-specific, driven by SunPower’s weakened cash flow and balance sheet as well as its inability to tap capital markets given its non-current SEC filing status, and does not view this as a read-through for other companies under coverage, the analyst tells investors. The firm believes SunPower is a low-single digit percentage of revenue for Enphase Energy (ENPH) and does not expect a material impact for the latter, adding that SunPower’s dealer partners seeking alternative partnerships could be “a mild positive” for Sunnova Energy (NOVA) and “less so” for Sunrun (RUN). The firm maintains an Underweight rating on SunPower shares.