UPDATE: J.P. Morgan Initiates Coverage on SolarCity on Pure-Play Market Leader Position

In a report published Thursday, J.P. Morgan analyst Paul Coster initiated coverage on

with an Overweight rating and $68.00 price target. In the report, J.P. Morgan noted, “SolarCity is the pure-play leader in roof-top solar, a growth sweet-spot in the large solar PV market. Long-term (20-year) solar-as-a-service contracts benefit the homeowner end-customer with low-cost, fixed-rate electricity and yield cash flow visibility for SCTY that supports asset-backed funding of rapid growth and sustainable competitive advantage, we believe. We view the stock as undervalued based on projected retained value – the NPV of long-term service contracts, net of upfront funding. We are initiating coverage with an Overweight rating and 2014 year-end price target of $68.” SolarCity Corp. closed on Wednesday at $52.38.