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Avondale Analyst Has Call With Sunedison Management Amid Massive Selloff, Sees 133% Upside

Jim Swanson
  • Shares of Sunedison Inc (NYSE: SUNE) have plunged 46.29 percent over the past five trading days, dropping almost to their 52-week low on Tuesday at $2.714.

  • Avondale’s Michael Morosi maintained a Market Outperform rating on the company, with a price target of $7.

  • Morosi mentioned that the aggressive sell-off on Tuesday was led by a combination of market rumors associated with macro facts and specious analysis.

Analyst Michael Morosi, following discussions with management, reported that funds from the announced recapitalization had been received by Sunedison as planned, on January 11. The company issued an 8-K with the final details of the transaction on January 12.

Related Link: Axiom's Gordon Johnson 'More Cautious' On Sunedison's Ability To Make It Through 2016

Given that the sell-off occurred after this, Morosi believes that “it is likely that the equity component of the exchange offers may prove more dilutive than originally contemplated,” although this does not justify the pullback in the stock.

Management also stated that the Vivint Solar Inc (NYSE: VSLR) acquisition would be closed within the next two weeks, following the FTC clearance, expected on January 15.

According to the Avondale report, “The company is working on selling the ~500MW of operating assets, which we believe will bring in as much as $800M of liquidity.”

“Net, we view SUNE as a stronger, better capitalized company than it was a week ago when the equity traded 100 percent higher,” Morosi added.

Latest Ratings for SUNE

Date

Firm

Action

From

To

Jan 2016

Axiom

Upgrades

Sell

Hold

Jan 2016

Avondale Partners

Upgrades

Market Perform

Market Outperform

Jan 2016

Credit Suisse

Maintains

Outperform

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