Credit Suisse Smashes SunEdison Bear Thesis, Maintains Outperform Rating

In a report published Thursday, Credit Suisse analyst Patrick Jobin maintained an Outperform rating on

, with a price target of $35, highlighting that the company had access to capital to generate returns. SunEdison announced a partnership with

for "the 420 MWdc/320 MWac "Four Brothers" solar project in Utah," analyst Patrick Jobin said. Dominion plans to invest $500m for the tax equity and 50 percent interest in the cash flows. SunEdison would develop the project and retain 50 percent of cash flows. Jobin believes that SunEdison would be able to fund its contribution with $150m project-level debt, resulting in no net equity investment, albeit incurring opex. SunEdison also announced that it had successfully raised $280m in debt for Warehouse 2.0 to hold the Atlantic Power Assets. This puts rest to concerns that the company would not be able to close the warehouse. In the report Credit Suisse noted, "We continue to believe bears are barking up the wrong tree on funding concerns and the panic selling is severely overdone. Assuming SUNE sells assets to third parties…we arrive at ~$1.6/share of post-debt earnings power in 2016. Assuming a 10x multiple, which would be very conservative in our view, plus ~$6 value in LP interests in the yield vehicles and no value from the IDR stream, we arrive at a ~$22 "downside" valuation floor support level under a build and sell model."