Shares of SunPower Corp. fell nearly 8 percent Monday after a Needham analyst downgraded the maker of solar cells and panels, saying currency concerns and spending cuts in Europe pose risks to the company's business there.
Analyst Y. Edwin Mok downgraded the shares to "Hold" from "Buy," pointing to possible subsidy cuts in Europe and economic concerns in the region linked to heavy debt burdens and resulting austerity measures.
The euro touched another four-year low on Monday and markets in Europe dropped, a sign of growing concerns about Europe's ability to rein in its debt without falling back into recession. U.S. companies with large businesses in the eurozone also are feeling the heat.
SunPower has lost market share in California but has grown sales to Europe, Mok said. The company derived 60 percent of its first-quarter sales from Europe compared with 35 percent in the same period a year earlier, he noted. As such, it is facing increased risks associated with the falling euro and economic problems facing the continent.
Class A shares of San Jose, Calif.-based SunPower fell $1.03, or 8 percent, to $11.87 in midday trading. The stock has traded between $10.11 and $34 in the past 52 weeks.
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