Analyst Actions: SolarCity Downgraded To Neutral, PT Raised $6 at Credit Suisse; Shares Fall 3%


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SolarCity Corp. ( SCTY ) has been downgraded by analysts at Credit Suisse to a Neutral rating from Outperform. Despite the downgrade, the firm has raised its price target on the stock to $28 from $22 a share.

"While we continue to believe SolarCity has good long-term prospects, and we expect the limited float could sustain near-term performance, we think it is prudent to take some profits at these levels ahead of the lock-up expiration on June 11," said Credit Suisse. "We estimate that nearly half the actively traded float of SCTY is short - a short squeeze may have contributed to SCTY's stock appreciation of over 300% since the IPO in December 2012 and 200% YTD. The lock-up would increase the tradable float by 8-10 times, which could ease the short squeeze and place downward pressure on the stock from current levels. We are revising our 2013 EPS from ($0.84) to ($1.54) and 2014 from ($0.90) to ($1.73) due to model revisions."


"Our PT methodology continues to be based a DCF of expected installations and value creation. We are now using a WACC of 15%, revised lower from 20%, to reflect a growing execution track record, and therefore bumping up our PT from $22 to $28."

Shares of SCTY are down almost 3% to $34.82 in mid-day trade, but are still in the high end of their 52-week range of $9.20 - $39.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

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