- JPMorgan sees `massive' long-term growth opportunities
- SunEdison has lost more than half of its value this month
Two investment banks issued bullish reports on SunEdison Inc., the renewable energy developer that’s lost more than half its market value this month.
Analysts for JPMorgan Chase & Co. and Macquarie Group Ltd. both initiated coverage of SunEdison Monday with the equivalent of buy ratings, saying the company is poised to take advantage of a global boom in clean power.
SunEdison is “executing on a massive long-term growth opportunities,” Paul Coster, a New York-based analyst for JPMorgan, said in a note to investors. “SunEdison is positioned to capture meaningful share of the $100s of billions of annual cash flow that will be generated from the operation of wind, solar and hydro assets.”
SunEdison has grown rapidly through acquisitions and by creating two publicly listed companies, TerraForm Power Inc. and TerraForm Global Inc., to own and operate the power plants it builds. Its shares have fallen 55 percent this month, including a 25 percent plunge on Aug. 6 after reporting a bigger-than-expected quarterly loss that sent shares tumbling.
Investors have raised concerns about the company’s liquidity amid plans to build more than 50 gigawatts of power plants. Analysts remain positive about the stock, which has 12 buy ratings, 4 holds and one sell, according to data compiled by Bloomberg.
Coster said the selloff of SunEdison shares was “overdone,” and the company has demonstrated the ability to raise cash when needed. “Skeptics may underestimate SunEdison’s ability to boost liquidity by selling projects to third parties or by securing a strategic equity injection.”
That makes the SunEdison story “very compelling,” Angie Storozynski, a New York-based analyst for Macquarie, said in a research note Monday. “Demand for renewable power projects will continue to grow worldwide regardless of the level of oil prices.”