SolarCity (SCTY) Price Target Trimmed to $88 at Goldman Sachs

Goldman Sachs maintained a Conviction Buy rating on SolarCity (NASDAQ: SCTY) and lowered its price target to $88.00 (from $90.00). 2014E-16 EPS estimates were adjusted to $(3.79)/(4.32)/(2.95) from $(4.14)/(3.34)/(1.14).

Analyst Brian Lee said, "At 230MW, new bookings hit another volume record and were +6% qoq, although we think bullish investor views were likely closer to 250MW. That said, SolarCity raised its 2015 volume guidance slightly to 920-1,000MW, or 1% vs. prior, which was offset by a 2% reduction in its 2014 view owing to commercial lumpiness."

"Driven by mix, SolarCity posted a $1.72/W retained value, a slight disappointment given recent focus on $1.75/W as a target and 2Q’s c.$2/W. Given higher scrutiny in the past 1-2 months, however, we believe this reset in expectations removes a recent stock overhang; our $1.65-$1.70/W view for FY14E-16E is unchanged," he added. "We believe the new CFO is already making his mark, with costs down to $2.90/W in 3Q – ahead of our $3/W expectation owing to $0.10/W qoq savings in system costs. Additionally, opex guidance for 4Q implies further cost leverage, particularly on sales costs which we estimate to go sub-$0.45/W (vs. $0.50/W in 3Q)."

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 $54.44 yesterday.

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