Cowen Positive on First Solar (FSLR), SunPower (SPWR) Joint Venture; Offers Initial Commentary
Cowen and Company is commenting on SunPower (Nasdaq: SPWR) following news that it and First Solar (Nasdaq: FSLR) are forming a joint venture.
Analyst Jeffrey Osborne sees the move creating additional value for shareholders of both companies. The analyst noted:
- we are pleasantly surprised that First Solar has taken this step, given management's prior intention not to form a YieldCo, and see this as a positive decision in light of its mostly utility-scale project exposure to the ITC expiration; and
- we have expected SunPower to continue on this path, as the company has already indicated such intentions as recently as November's Analyst Day and subsequent investor conferences.
Osborne pointed out a few advantages of forming the YieldCo. joint venture:
- Low cost of capital and reduced corporate risk profile
- Value creation, versus sale at Cash on Delivery (COD)
- Natural efficient buyer of projects
- Retained asset ownership, creating long-term upside
- Recurring cash flow stream through dividend