UPDATE: Morgan Stanley Initiates Coverage On SolarCity As Promising Growth Is Largely Priced In

In a report published Thursday, Morgan Stanley analyst Timothy Radcliff initiated coverage on

with an Equal-Weight rating and $92.00 price target. In the report, Morgan Stanley noted, “We forecast the addressable market for residential solar in the US at 168GW by 2020, significantly above the <4GW of installed capacity today. Our proprietary state-by-state solar economic model calculates levered project returns based on average electricity pricing and sunshine levels across the country.Even assuming that fixed charges of 50% of the transmission and distribution (T&D) portion of bills are levied on solar customers, we think the addressable market will support significant growth off of the current residential base of <4GW.Weforecasta 27% CAGR for the entire distributed generation segment between 2013 and 2020,even assuming that the Investment Tax Credit (ITC) steps down to 10% after 2016.” SolarCity closed on Wednesday at $71.08.