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SunEdison Is A Buy And More Hedge Funds Will Buy In, Baird Says

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In a report published Wednesday, Baird analysts initiated coverage of Sunedison, Inc (NYSE: SUNE) with an Outperform rating and a price target of $35.

SunEdison is a leading player in the renewable energy projects segment with a large development pipeline and strong presence across the globe. The company has recently entered the wind and hydropower segments.

The company's long-term prospects remain bright, given its expansion plans and large pipeline of projects. "Although SUNE has had strong YTD returns of ~48% and significantly outperformed the S&P (+3.1%), we believe the company will continue to attract new investors as it executes on its growth plan, launches TerraForm Global, and continues to expand in the U.S. and international markets," the analysts mentioned.

The company expects to witness strong MW deployment growth over the next three years. The deployments are expected to reach 2.2 GW in 2015, ~2.9 GW in 2016, and ~4.0 GW in 2017 making SunEdison one of the fastest growing solar companies in terms of MW deployed.

"SUNE is well positioned for long-term success given its large pipeline of projects (~7.5 GW), captive sales channel for projects through TerraForm Power, upcoming launch of TerraForm Global, and the ability to address all customer classes with an international footprint," the analysts stated.

SunEdison's stock is expected to benefit from increased dividend and IDR payments from the company's yieldcos, continued expansion into newer markets and increased MW deployment.

SunEdison's yield company TerraForm Power (NASDAQ: TERP) purchases renewable projects with long-term contracts in place, collects revenue through the sale of electricity and pays cash flows to shareholders via dividends.

Latest Ratings for SUNE

DateFirmActionFromTo
Mar 2016Stifel NicolausTerminatesHold
Mar 2016Axiom CapitalMaintainsSell
Mar 2016Avondale PartnersDowngradesMarket OutperformMarket Perform

View More Analyst Ratings for SUNE
View the Latest Analyst Ratings

Posted-In: BairdAnalyst Color Initiation Analyst Ratings

 

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