Janney Trims SunEdison Estimates: Here's Why

• The share price of Sunedison, Inc. SUNE has declined 67.86 percent over the past three months, touching a low of $6.66 on September 29.
• Janney’s Michael Gaugler has maintained a Buy rating on the company, while lowering the price target from $23 to $20.
• SunEdison has announced its preliminary cash balance for 3Q at $1.38 billion, while lowering its 2016 MW and opex cost guidance.

Analyst Michael Gaugler called the company’s 3Q15 preview a pleasant surprise, given that the cash balance expected at the end of the quarter would be a significant increase from the 2Q levels.

SunEdison also announced that it had “received a margin call on its loan, and that the terms had been reworked.” The margin call and the consequent revisions had been expected, given the existing market conditions.

According to the Janney report, “The $152MM call payment will be returned to SUNE when the loan is ultimately repaid.”

In addition, SunEdison said that it expects to successfully close the acquisition of Vivint Solar, Inc. VSLR. However, Gaugler believes that investors are unlikely to receive this announcement positively, following the failure of SunEdison’s planned acquisition of Latin America Power.

The estimates for 2016 have been adjusted, based on the revisions in the company’s guidance.