SunEdison Rated 'Outperform' At Credit Suisse Because Of This Scenario

In a report published Thursday, Credit Suisse analysts reinstated coverage of

with an Outperform rating and a price target of $39, following the announcement of the pricing of the company's capital raise initiative. The company announced that it intended to raise gross convertible debt worth $750 million. Earlier this week, SunEdison has announced that it intended to implement a strategic review to "to potentially position and maximize the SunEdison ParentCo's GP cash flows more in-line with a traditional GP/LP structure well understood in the MLP space, appropriately earning a higher multiple." The analysts expect the capital raise to positively impact the income statement for materials, provides funds a part of Warehouse 2.0 and position the TerraForm Global business for growth going forward. "With the increasing confidence in the quickly approaching and rapid growth prospects of the IDR cash flow stream to SUNE, and optionality of accelerating growth from thirdparty acquisitions, the company is also contemplating delineating these cash flows separately in a GP-like structure," the analysts said. The EPS estimates for 2015, 2016 and 2017 have been raised to reflect changes to the share count as well as interest expense.