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The Zacks Analyst Blog Highlights: Wells Fargo, SunEdison, JPMorgan Chase, KeyCorp. and Agnico Eagle Mines

Zacks Equity Research

For Immediate Release

Chicago, IL – June 28, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Wells Fargo & Company (WFC-Free Report), SunEdison, Inc. (SUNE-Free Report), JPMorgan Chase & Co. (JPM-Free Report), KeyCorp. (KEY-Free Report) and Agnico Eagle Mines Limited (AEM-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday’s Analyst Blog:

Wells Fargo to Invest in Solar Power


Wall Street banks’ attraction towards solar energy seems to continue. On Wednesday, Wells Fargo & Company (WFC-Free Report) announced a further investment of more than $100 million of tax equity financing over the next 18 months to SunEdison, Inc. (SUNE-Free Report) – a leading solar energy provider.

Wells Fargo plans to invest in distributed generation solar power projects developed by SunEdison. Since 2007, the banking major has financed almost 200 utility-scale solar projects throughout 13 U.S. states and Puerto Rico, for an amount worth $950 million. This has allowed SunEdison to provide clean and cost-effective energy to its customers.

SunEdison designs its projects according to the terms of a power purchase agreement (
PPA). Its customers buy the energy produced for a fixed rate as specified in the PPA. Hence, third-party investors are beneficial to SunEdison as they facilitate the company to install solar power equipment without requiring customers to pay upfront costs. Since 2008, SunEdison has garnered approximately $5 billion in project financing for solar power plants.

Recently, Sunrun – a privately held rooftop solar solutions provider – secured funds worth $630 million from JPMorgan Chase & Co. (JPM-Free Report) to acquire and install solar power equipment.

Financing solar installations have become attractive for major banks as they enjoy tax rebates, including a solar tax credit. The federal tax credit is equivalent to 30% of a project's cost. Moreover, at times, banks receive a fraction of the homeowners' lease payments, as per the terms of the deal.

An acute awareness of the benefits of green energy exists in the U.S., as evinced in the rising demand for rooftop panels from homeowners and businesses in recent times. Consequently, financial markets have recognized renewable energy as an immensely valuable asset. Notably, distributed solar alone has secured almost $1 billion in third-party financing from Wall Street biggies in the last few days.

Wells Fargo currently carries a Zacks Rank #3 (Hold). KeyCorp. (KEY
-Free Report) is a better performing stock, which carries a Zacks Rank #2 (Buy).


Agnico-Eagle Downgraded to Strong Sell


Zacks Investment Research downgraded Agnico Eagle Mines Limited (AEM-Free Report) to Zacks Rank #5 (Strong Sell).

Why Downgraded?

Agnico-Eagle’s earnings estimates and share prices witnessed a downward trend after reporting disappointing first quarter 2013 results on Apr 25. Earnings estimates for this Canada-based gold mining company have been on the downside due to its high operating costs across a number of mines and a weak gold price environment.

The company’s adjusted earnings (excluding one-time items other than stock-based compensation expenses) of 24 cents per share lagged the Zacks Consensus Estimate by 10 cents. Profit for the first quarter slid roughly 70% on lower gold prices and production as well as higher cash costs.

The company delivered negative earnings surprises in the last two quarters with an average of 6.13% for the last four quarters. The company’s long-term estimated EPS growth rate is 2.3%. Shares of Agnico Eagle also attained a 52-week low on Jun 26 of $25.00.

Payable gold production declined in the quarter, mainly due to the suspension of the Creston Mascota heap leach facility. While Agnico-Eagle achieved record quarterly throughput at its Meadowbank mine in northern Canada, its Kittila mine in northern Finland saw a decline in payable gold production in the quarter. The company backed its production guidance for the full year

Moreover, one of Agnico-Eagle’s main issues has been persistently high operating costs across a number of mines. Total cash cost jumped around 25% year over year in the first quarter, mainly due to lower by-product revenue at LaRonde and lower grades at Meadowbank.

Agnico-Eagle raised its cash cost guidance for 2013 to a range of $735-$785 per ounce from earlier expectation of $700-$750 to reflect weak metals prices and production changes at Goldex and Kittila mines. The company is exposed to a weak gold price environment, which may continue to affect its bottom line.

The Zacks Consensus Estimate for 2013 has gone down 45% to 95 cents per share as most estimates were revised lower over the last 60 days. Similarly, the Zacks Consensus Estimate for 2014 has also decreased 21% to $1.63 per share.


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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