Truist expects selloff across resi solar group after SunPower preannouncement

Truist analyst Jordan Levy notes that ahead of resi solar peer Q2 releases this week and SunPower’s (SPWR) August 1 report, the company announced preliminary Q2 results well below estimates, along with a significant FY23 guidance cut on all major KPIs, citing demand weakness particularly in the Southeast and Southwest as the key driver. The firm would expect to see a meaningful selloff across the resi solar group complex with SunPower’s release substantiating investor concerns on deteriorating conditions for U.S. resi. While Truist would expect particular weakness in names like Sunnova (NOVA) given southeast/southwest exposure, it continues to expect a more positive release when Sunnova reports this afternoon. Ultimately given the continued near-term uncertainty/headwinds facing U.S. resi, the firm continues to favor the utility-scale solar group and names with international/C&I exposure where it sees more clear structural demand drivers, highlighting Array (ARRY) and SolarEdge (SEDG) as two names it sees as well suited to perform in the current macro environment. Truist has a Hold rating on SunPower shares with a price target of $13.