FBR Capital Starts TerraForm Power (TERP) at Outperform

FBR Capital initiates coverage on TerraForm Power (NASDAQ: TERP) with a Outperform rating and a price target of $36.00.

Analyst Aditya Satghare said, "TerraForm owns and operates solar assets acquired through its relationship with SunEdison, Inc. (SUNE – Outperform), and we see meaningful upside to management’s 15% long-term cash available for distribution (CAFD) growth target. Along with a solid operating team of industry veterans, TerraForm’s competitive advantage lies in its access to SunEdison’s multi-gigawatt solar project pipeline, as well as third-party acquisition opportunities given its attractive cost of capital. We believe that overall completions, asset development, and acquisition targets for SunEdison should continue to surprise to the upside, which should lead to increased drop-down potential into TerraForm. While the interaction between SunEdison and TerraForm remains complex, we see multiple options for TerraForm to further increase value to its own shareholders by optimizing its long-term leverage and pursuing both debt and equity options to acquire additional projects. Our base-case scenario leads to a $36 price target, and our upside scenario leads to a stock price closer to $46, indicating meaningful potential upside from current levels."

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

Shares of TerraForm Power closed at $30.11 yesterday.

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