J.P Morgan Lowers price target on Sunedison Inc (NYSE:SUNE) To $19


Equity Analysts Paul Coster, CFA AC, Mark Strouse, CFA, and Paul J Chung of Investment Research Firm J.P Morgan issued a research report and Overweight rating on Sunedison Inc (NYSE:SUNE) titled ”Lowering Price Target to $19, Maintain Overweight” On September 28 with a new $19 price target.

The report noted that ”In conjunction with estimate revisions for SUNE’s two YieldCos GLBL and TERP (see separate notes), we are lowering our sum-of-the-parts based price target for SUNE to $19, from $23. We believe the weakness in the stock over the past few days (down 37% over the past week vs SP500 down 4%) has been driven primarily by concern regarding SUNE’s $410mm margin loan, collateralized by Class B shares of TerraForm Power (TERP/OW). As the value of TERP’s shares has declined, SUNE has been forced to put up more collateral, weighing further on sentiment. We maintain our Overweight rating.”

Sunedison Inc (NYSE:SUNE) bills itself as the largest global renewable energy development company and is transforming the way energy is generated, distributed, and owned around the world. The company develops, finances, installs, and owns and operates renewable power plants, delivering predictably priced electricity to its residential, commercial, government and utility customers. SunEdison is one of the world’s largest renewable energy asset managers and provides customers with asset management, operations and maintenance, monitoring and reporting services. Corporate headquarters are in the United States with additional offices and technology manufacturing around the world.

According to the report Long-term growth in wind and solar generating capacity seems inevitable Demand for wind and solar power originates in falling unit cost/watt, growing demand for electricity in emerging nations, and government policy that seeks to decarbonize the global economy. BNEF estimates that ~$6 trillion will be invested in wind and solar capacity over the next 25 years. SUNE, as a leading global developer of renewable generating capacity, will participate in this growth opportunity through development and sale of systems and through ownership of wind and solar farms, realizing gross profit from sales, and cash flows from ownership of operating assets. Global wind and solar generating capacity should reach about 1.4TW as soon as 2020, yielding up to ~$170 billion of cash available for distribution (CAFD).”

Also on September 28 SUNE announced the completion of three solar canopy systems for the City of Fremont, Calif. The systems are expected to generate 1.2 megawatts (MW) DC of clean, reliable electricity for the city.

The solar canopy systems are mounted on canopy structures over parking lots at the city’s Irvington Community Center, the Aqua Adventure Water Park, and the Robert Wasserman Fremont Police Center. The solar systems are expected to generate enough energy to power almost 150 homes each year and avoid the emission of more than 500 tons of carbon dioxide annually, equivalent to the amount of carbon sequestered by approximately 425 acres of forest.

The press release goes on to say that The City of Fremont signed 20-year power purchase agreements with SunEdison as part of the Regional Renewable Energy Procurement Program (R-REP) led by Alameda County.

SunEdison’s general manager of west coast commercial and industrial solar, Sam Youneszadeh said “Fremont is making a positive impact on the local community by installing these solar canopy systems over several of the city’s parking lots. By going solar, the city is saving taxpayer dollars, reducing their carbon footprint and supporting local jobs. These projects are the result of the successful Regional Renewable Energy Procurement Program, which allowed cities across Alameda County to participate in the Bay Area’s sustainable energy future.”


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