Deutsche Bank Upgrades SunEdison (SUNE) to Buy

Deutsche Bank upgraded SunEdison (NYSE: SUNE) from Hold to Buy with a price target of $35.00 (from $13.00). Analyst Vishal Shah doesn't think its Yieldco is priced in.

"We are updating our thoughts, taking a closer look at SUNE's YieldCo plans and highlighting the valuation upside potential from a successful execution of YieldCo strategy. Bottom line - although shares have outperformed the broader sector ytd, we still see significant upside from current levels," said Shah.

"We are becoming increasingly constructive on the solar sector as we expect further tightening of the solar supply/demand balance and expect increased investor interest driving valuation multiple expansion. We expect the emergence of 5-6 publicly traded YieldCos over the next 12-18 months to act as a robust growth enabler as we expect a significant amount of low-cost capital to chase projects, driving improved project economics and greater amount of new project development. We expect this trend to be more pronounced in the US ahead of potential change in ITC from 2016. Although only a handful of YieldCos are targeting international markets in 2014, we expect greater participation from 2015 as solar grid parity is achieved in increasing number of international markets from 2015. More importantly, we see significant opportunities for growth outside of solar as global solar YieldCos diversify into other sources of power generation such as wind, hydro," he added.

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

Shares of SunEdison closed at $19.39 yesterday.

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