It’s time to buy the recent weakness in SunPower , Raymond James said. Analyst Pavel Molchanov upgraded the solar energy company to strong buy from outperform, saying concerns over the firm’s exposure to California are overdone given the underpenetrated U.S. residential solar market. “The only real concern about SunPower specifically is its above-average exposure to California: the state accounted for half of SunPower’s customer additions in 2022,” Molchanov wrote Wednesday. “This overweight to California has not impeded SunPower from continuing to grow in 2023, having guided to 90,000-110,000 incremental customers, up 20% y/y. Even if the increase ends up being only 10%, it would still be ahead of the U.S. market overall.” SPWR 1D mountain SunPower shares 1-day SunPower shares are down by more than 45% this year, a sell-off that the analyst views as “excessive.” Molchanov’s own price target of $21 is more than 120% above where the shares closed Tuesday. The stock popped more than 5% in Wednesday premarket trading. The sell-off is driven in part by the firm’s exposure to California, which earlier this year passed NEM 3.0. It’s a net metering policy that some criticize for lowering the overall savings for residential solar, even as it was designed in part to create a more resilient power grid. However, the analyst pointed out the poor adoption of rooftop solar in the U.S., which is significantly behind the roughly 15% adoption in Germany, and the 25% rate of adoption in Australia. That points to further growth for residential solar ahead. Meanwhile, SunPower has shown that it can continue to add customers, and diversify its business, pointing to “successfully adapting” national footprint, the analyst said. “Ahead of an adverse policy change, there is always demand pull-in … this is followed by (for lack of a better word) a hangover … and then growth resumes from the lower baseline,” read the note. “California is no exception. Thus, we look at the recent underperformance in SunPower shares as a buying opportunity.” — CNBC’s Michael Bloom contributed to this report.