SolarCity Sell-Off "Overdone," "Unwarranted," Say Analysts

SolarCity Corp

posted a lower-than-expected loss per share and an increase in revenue in a fourth-quarter report yesterday, but shareholders were disappointed in the company's performance. The company announced a first-quarter guidance $(2.55) to $(2.65), below Street expectations of $(2.36). Shares lost nearly 30 percent of their value in trading Wednesday morning as investors fled the stock. Wall Street analysts thought investors' reaction was too dramatic, however. Morgan Stanley analyst Stephen Byrd called the sell-off "significantly overdone," noting the company's outlook was bearish coming into the report and the solar sector's strong fundamentals. Byrd maintained an Overweight rating for the company with a price target of $104. Bernstein's Hugh Wynne wrote that the sell-off was "unwarranted," citing a stronger solar installation outlook than when the company initially set 2016 guidance. The analyst expressed confidence in the company's ability to fund its 2016 growth. Stifel Nicolaus, Raymond James and Deustche Bank, all upgraded SolarCity to Buy despite lowering price targets to $65.00, $60.00 and $49.00. Roth Capital also upgraded the company to Buy. JP Morgan and Credit Suisse maintained Overweight and Outperform ratings and lowered price targets to $44.00 and $89.00, respectively. Other solar companies' stock tumbled with SolarCity, with Sunrun Inc

shares falling by 11 percent Wednesday morning. SunPower Corporation

was down nearly 3 percent. SolarCity shares sat at $19.46 at time of writing, less than a third of an August 2015 high of $60.17.