Susquehanna analysts cut shares of Plug Power (NASDAQ:PLUG) and SunPower (NASDAQ:SPWR) to Neutral from positive on Thursday, saying that the rating changes reflect the preference for new capital.
For the solar industry as a whole, the firm believes the residential segment is likely to see recent headwinds continue into at least the first half of this year before demand gets better heading into 2025.
Meanwhile, for utility scale, analysts said momentum should continue with some incremental tailwinds.
The firm lowered the SPWR price target to $4, primarily given the slow recovery in California and the company's relatively higher exposure to the market.
Susquehanna believes that SPWR's "relatively weaker financial position" puts it at "a disadvantage compared to peers," especially as California transitions from a solar-only to a solar and storage market.
The PLUG price target was cut to $4.50 from $9. Analysts said the downgrade was due to delays related to both PLUG's green hydrogen production facility buildout and securing external funding sources to finance its growth plans.
"Additionally, the recent Treasury guidance on production tax credits was less advantageous than expected and could cause PLUG to shift locations on future production facilities," added the analysts.