SolarCity Corp. (
) 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
"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 -
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