Axiom Capital Starts SolarCity (SCTY) at Sell

(Updated - October 19, 2015 6:55 AM EDT)

Axiom Capital initiated coverage on SolarCity (NASDAQ: SCTY) with a Sell rating and a price target of $24.00.

Analyst Gordon Johnson highlighted the following six items around the negative rating:

1. Utilities are increasing winning the net metering battle.
2. SCTY's adj-Cost of capital is above ROIC.
3. SCTY is engaging in Subprime lending practices, which have already spawned a number of class action lawsuits.
4. Risk around U.S. treasury dept. investigation of SCTY related to overstating retained value.
5. Gigafab runs risk of the same mistakes that drove some utilities into bankruptcy in 2012.
6. Insider selling by the CEO and CTO of $50M each.

For an analyst ratings summary and ratings history on SolarCity click here. For more ratings news on SolarCity click here.

Shares of SolarCity closed at $44.16 yesterday.

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