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SunPower Stock Eyes Best Day Since 2013 After Earnings

Patrick Martin

One of the best stocks on Wall Street today is SunPower Corporation (NASDAQ:SPWR), up 35% to trade at $15.10, and earlier nabbing a three-year high of $15.67. The alternative energy issue reported second-quarter revenue of $481.90 million -- topping expectations of $451.64 million -- while also upping its fiscal-year outlook. SunPower cited growing demand for solar panels in North America as a catalyst for the blowout revenue figure. In response to the quarterly report, the security's options pits have exploded.

More specifically, over 18,000 options have already changed hands today -- 16 times the average intraday amount and on pace for a new annual high. Leading the charge is the weekly 8/30 13-strike call, where new positions are being opened. Buyers of these calls are expecting SPWR to extend today's gains above $13 through the end of the month.

This is pacing to be SPWR's fifth straight win and best single-session gain since January 2013. SunPower stock last nabbed a multi-year high on July 9, and that subsequent pullback set off a flurry of bullish alarms. The equity now has racked up an impressive 155% gain in 2019, and just wrapped up its seventh straight monthly win.

So far, Credit Suisse has upgraded the solar stock to "outperform" from "neutral," while upping its price target to $14.50 from $8. Baird and J.P. Morgan Securities have chimed in with price-target hikes as well, to $14 and $12, respectively. The former also expects margin expansion and top-line growth to lift earnings in the second half of 2019. Even with today's bull notes, though, SPWR is overdue for more. Only one brokerage considers the equity a "strong buy," and the consensus 12-month price target sits in single digits at $9.72 -- a roughly 40% discount to current levels.

Short sellers are set to keep getting scorched too. Short interest fell 7.4% in the most recent reporting period, to 17.37 million shares, the lowest in a year. However, this still accounts for a hefty 28% of SPWR's total available float, and nearly eight days' worth of pent-up buying power, at its average pace of trading.