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

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