Needham & Company Raises Price Target on SunEdison (SUNE) Following Recent Financing
Needham & Company reiterated a Buy rating on SunEdison (NYSE: SUNE), and raised the price target to $31.00 (from $30.00), following recent rounds of financing. Analyst Edwin Mok believes that the recently completed 2 rounds of financing is needed to fund the 2016 growth target, as well as to shore up the company's balance sheet. The recent decline in stock price is a reflection of investor concern. However, the recent moves ensure that SUNE and its yieldcos can execute their plans for drop down without the need to raise additional equity.
Mok commented, "SUNE recently completed 2 rounds of financing, which we believe is needed to fund the strong 2016 growth target and to shore up its balance sheet. The recently sharp decline of the stock price reflects increased investor concern over its yieldco-based business model in a falling yieldco share price (or a rising yield) environment. The latest moves ensure that SUNE and its yieldcos can execute their plans for drop down without the need to raise additional equity, giving investors visibility for growth through 2016. With the challenging equity market, SUNE could continue to face some pressure as it continues to scale its business bigger, but we believe management has demonstrated its ability to adapt to the market environment quickly and should be able to achieve long-term success. Reiterate Buy, PT up slightly to $31."
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Shares of SunEdison closed at $14.50 yesterday.