Sunedison Wants To Simplify Its Operations: Will It Help The Company?

Shares of Sunedison Inc SUNE spiked higher by more than 7 percent Monday morning, but are still down nearly 54 percent year-to-date.

Sunedison announced on Monday a series of actions to "optimize its business operations in alignment with current and future market opportunities, and accelerate cash flow positive operations."

Krish Sankar of Bank of America reacted favorably to the announcement and maintained a Buy rating and $18 price target.

Shares of Sunedison spiked higher by more than 7 percent Monday morning as investors and traders found bullish signs in the company's announcement that it will restructure its business.

According to the company's press release, Sunedison announced a series of global initiatives to "optimize its business operations in alignment with current and future market opportunities, and accelerate cash flow positive operations."

Business Restructuring

Specifically, the company will "take advantage of its scale" and will: 1) focus on high profit markets including the United States, India, China and Latin America; 2) simplify its business structure through centralizing operations; 3) deliver cost reductions and capture economies of scale.

Looking Ahead

Sunedison will host a conference call on Wednesday to discuss its initiatives. A copy of its slide presentation can be accessed through its

investor relations

website prior to the presentation.

Krish Sankar of Bank of America briefly commented in a note that Sunedison's management presented a set of "much-needed" actions to better align itself for future market opportunities.

"With its stock under pressure, investors have been looking for some update rom the management on ways to improve the cash flow and simplify the business," Sankar wrote.

Sankar added that it is still likely Sunedison's management will reduce its 2016 completion guidance given continued weakness in high yield credit marks and the high cost of equity across its corporate complex. Nevertheless, the analyst did note that he continues to see "value" in the stock.

Shares remain Buy rated with an unchanged $18 price target.

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