Skip to main content

Market Overview

8Point3 Energy Is Fairly Valued In The Event Of A Sale, Says JPMorgan

8Point3 Energy Is Fairly Valued In The Event Of A Sale, Says JPMorgan

8Point3 Energy Partners LP (NASDAQ: CAFD) was initially founded as a joint venture yieldco between First Solar, Inc. (NASDAQ: FLSR) and SunPower Corporation (NASDAQ: SPWR) with the intention of buying solar assets from both entities and then paying up to 80 percent as a dividend. But now that First Solar is looking to sell its 28-percent stake in 8Point3 and SunPower is also looking to sell a 37-percent stake investors are left wondering what happens next. 

The Analyst

JPMorgan's Mark Strouse assumed coverage of 8Point3's stock with a Neutral rating and $16 price target versus the firm's prior coverage with an Overweight and $16 price target.

The Thesis

Three potential outcomes exist for the solar company in Strouse's view:

  • A new sponsor acquires a majority stake (35 percent probability).
  • 8Point3 is fully acquired (45 percent probability).
  • No deal occurs (20 percent probability).

Nevertheless, the stock will remain a high-quality and low-risk choice for yield investors, the analyst said. 

"We believe there is a less than 50-percent chance that 8Point3 receives a new sponsor and remains an independent company, allowing shareholders to participate in future gains, while there is a greater than 50-percent chance that either 8Point3 is wholly acquired or a deal fails to materialize, in which case the stock seems appropriately valued," Strouse said. 

The case for further upside could be found in the event that a well-capitalized sponsor assumes a majority stake and the Street reacts with positive revisions to estimates, according to JPMorgan. 

Price Action

Shares of 8Point3 were trading lower by nearly 4 percent Tuesday afternoon. 

Related Links:

8Point3 Downgraded On Increasing Concerns Regarding Its Future

Gordon Johnson On 8Point3: There Are A Lot Of Similar Characteristics To SunEdison, SolarCity

Latest Ratings for CAFD

Feb 2018BairdMaintainsNeutralNeutral
Feb 2018Raymond JamesDowngradesStrong BuyMarket Perform
Jan 2018BairdDowngradesOutperformNeutral

View More Analyst Ratings for CAFD
View the Latest Analyst Ratings


Related Articles (CAFD)

View Comments and Join the Discussion!

Posted-In: JPMorgan Mark Strouse Solar YieldCoAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

Latest Ratings

UWMCBarclaysInitiates Coverage On10.0
ADMB of A SecuritiesInitiates Coverage On68.0
UNHArgus ResearchUpgrades450.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at