SunPower (SPWR)/First Solar (FSLR) YieldCo is Like Duke and UNC Partnering... Huge - Raymond James
Get Alerts SPWR Hot Sheet
Rating Summary:
6 Buy, 23 Hold, 15 Sell
Rating Trend: Down
Today's Overall Ratings:
Up: 20 | Down: 14 | New: 22
Join SI Premium – FREE
Raymond James analyst Pavel Molchanov reiterated an Outperform rating and $35 price target on SunPower (NASDAQ: SPWR) following earnings and the "huge" news that the company will enter a joint venture with rival First Solar (NASDAQ: FSLR) with plans to create a YieldCo.
Molchanov likens news the long-standing rivals are teaming up to Duke/UNC or Coke/Pepsi partnering. "Put simply, this is one of the industry’s biggest milestones of the past 12 months – and obviously bullish for both partners," the analyst said.
He added, "SunPower’s “holdco” has ticked up from 640 MW to 660 MW, equating to distributable cash of ~$70-80 million and a likely market cap of ~$1.75-2.0 billion (at a 4% yield) – without, of course, anything from First Solar. For context, SunEdison’s TerraForm Power had initial capacity of 808 MW at its $577 million IPO last July. By joining forces, First Solar and SunPower can create an asset base that is even larger – or, alternatively, they can start off with a smaller portfolio but ensure a faster pace of dropdowns. With the S-1 set to be filed in 1Q, we see no reason why the IPO couldn’t take place in 2015. Two issues that will need to be addressed: (1) the yieldco’s geographic footprint; and (2) how the two rivals/partners (they will remain both) will structure their relationship."
For an analyst ratings summary and ratings history on SunPower click here. For more ratings news on SunPower click here.
Shares of SunPower closed at $27.80 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Dril-Quip (DRQ) and Innovex to Combine
- DraftKings (DKNG) Announces Leadership Changes to Increase Focus on Operational Efficiencies
- UBS Reiterates Sell Rating on Buckle, Inc. (BKE)
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Raymond James, S1, Earnings, Pavel Molchanov, IPOSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!