) has extended its long-standing supply agreement with Toshiba
through 2018. Pursuant to the supply agreement, SunPower would
provide over 100 megawatts of its highest efficiency residential
solar panels annually exclusively to Toshiba. Toshiba would offer
solar systems with SunPower's highest efficiency solar modules in
the rapidly growing Japanese residential market. Since the
company first teamed up with Toshiba in 2010, it has delivered
more than 150 MW of its high-performance solar panels.
Toshiba Corporation is a Japanese multinational electronics,
electrical equipment and information technology corporation
headquartered in Tokyo, Japan.
SunPower is a vertically integrated solar company with presence
across the entire solar value chain. The company designs,
develops, manufactures, markets and sells high-performance solar
electric power technology products, systems and services
worldwide for residential, commercial and utility-scale power
plant customers. The company's semiconductor-based solar cells
and solar panels, which convert sunlight into electricity, are
manufactured using proprietary processes and technologies.
SunPower is largely owned by French oil major
SunPower's customer base is spread across North America, Europe,
the Middle East, Asia and Australia. The company is proactive in
entering new markets. In addition to a sizeable presence in the
US, it is already focusing on improving market share in France,
Germany, Italy, Spain and Japan, while gaining new market share
in emerging markets like England, Greece, Israel and Malta.
SunPower is also increasing its global market presence within the
residential and commercial markets by expanding its network of
dealers. Finally, by steering clear of long-term contracts for
sales through its dealer network, the company is geared for
margin growth on the back of any short-term upswing in the solar
SunPower is however witnessing falling Average Selling Prices and
margins in its residential and small commercial markets segment
which accounts for approximately two-thirds of its top line. We
expect the trend to continue unabated in the near future with
valuation further restrained by the higher cost structure of the
company compared to its peers. Other risks include subsidy
roll-back in Europe and foreign exchange risk.
SunPower presently retains a short-term Zacks #2 Rank (Buy). Over
the longer run we maintain our long-term Neutral recommendation
on the stock.
SunPower mainly competes with
Suntech Power Holdings Co. Ltd.
First Solar, Inc.
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