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UPDATE: JPMorgan Starts SolarCity (SCTY) at Overweight

October 17, 2013 7:52 AM EDT Send to a Friend
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Price: $65.99 --0%

Rating Summary:
    8 Buy, 4 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 2
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(Updated - October 17, 2013 1:39 PM EDT)

JPMorgan initiated coverage on SolarCity (NASDAQ: SCTY) with an Overweight rating and a price target of $68.00. Analysts called the stock a core holding for alternative energy investors and said shares are undervalued based on retrained valued forecast through 2017.

"We view the stock as undervalued based on projected retained value – the NPV of long-term service contracts, net of upfront funding," said analyst Paul Coster.

"Rooftop solar could contribute 3.5% (121GW capacity) of US electricity by 2030, 6% (240GW) by 2050, from a base of under 0.1% today. SolarCity's 2018 target of 6GW (0.5GW today) looks easily attainable, with 2013 penetration rate at under 0.2% of 41 million home TAM . . .Solar City dominates roof-top solar with ~20% share of installations, and largest installed base of 0.5GW, or 75,000 customers. Competitive advantage originates in nationwide sales and distribution, purchasing power, vertically integrated delivery, and access to low-cost finance," said Coster.

"Accumulated value by 2018 could be very significant. The firm's 2018 target of 1 million customers and 6GW of capacity imply 5-year MW CAGR of over 60%, new contract growth of over 50%, and 2018 'retained value' of nearly $13 billion, representing ~$98/share on a present value basis," added the analyst.

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 $52.38 yesterday.




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Comments

Since when did solar companies trade on retained value?
Fundamental Investor on 2013-10-17 15:28:36
Mark as Spam | Reply to this comment

This is a joke? Classic pump and dump brought to you buy your underwriters at JP Morgan - who hold several warrants from the latest common stock offering


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