Baird Downgrades SolarCity (SCTY) to Neutral, Citing Risk/Reward

February 19, 2014 6:26 AM EST
Get Alerts SCTY Hot Sheet
Price: $20.34 --0%

Rating Summary:
    4 Buy, 16 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Baird downgraded SolarCity (NASDAQ: SCTY) from Outperform to Neutral and maintained its $81 price target.

"SCTY has demonstrated its ability to maintain/gain market share in the N.A. residential rooftop market, but we believe the current valuation prices in much of its growth/execution," analyst Ben Kallo states. "Furthermore, we believe risk vs. reward now warrants a Neutral rating. We would look for accelerated growth and continued system and financing cost reductions to become more constructive on the name."

Kallo believes execution through 2017 is largely priced into the stock. He also notes that, while still much to be decided, the February 14 ITC ruling on the imports of Chinese solar products could lead to higher input costs.

On Q4 results, the firm expects results to be in-line with guidance. They estimate SCTY installed ~101MW in Q4 and will maintain its 2014 guidance of 475MW to 525MW. They expect Q4 revenue of ~$43.5M and Non-GAAP EPS of $(0.59).

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 $79.95 yesterday.

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