Cowen Positive on First Solar (FSLR), SunPower (SPWR) Joint Venture; Offers Initial Commentary
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Price: $177.48 -1.45%
Rating Summary:
33 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
33 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Cowen and Company is commenting on SunPower (Nasdaq: SPWR) following news that it and First Solar (Nasdaq: FSLR) are forming a joint venture.
Analyst Jeffrey Osborne sees the move creating additional value for shareholders of both companies. The analyst noted:
- we are pleasantly surprised that First Solar has taken this step, given management's prior intention not to form a YieldCo, and see this as a positive decision in light of its mostly utility-scale project exposure to the ITC expiration; and
- we have expected SunPower to continue on this path, as the company has already indicated such intentions as recently as November's Analyst Day and subsequent investor conferences.
Osborne pointed out a few advantages of forming the YieldCo. joint venture:
- Low cost of capital and reduced corporate risk profile
- Value creation, versus sale at Cash on Delivery (COD)
- Natural efficient buyer of projects
- Retained asset ownership, creating long-term upside
- Recurring cash flow stream through dividend
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