- Avondale Partners and Axiom Securities have respectively upgraded SunEdison (SUNE) to Outperform and Hold a day after shares fell 39.4% in response to a dilutive set of financing and debt-reduction deals. Shares have bounced to $3.72 premarket on a morning S&P futures are up 1% following a favorable jobs report.
- Avondale: "Management has made significant progress restructuring the company's balance sheet, and SUNE's deeply distressed valuation does not reflect the value of its underlying assets." The firm now thinks SunEdison's business model is substantially de-risked, thus "allowing investors to focus on the company's ability to generate up to $1 billion in cash flow between now and its next debt maturities in early 3Q18."
- It also believes SunEdison's transparency has improved, leading to better visibility regarding future cash flows. "With liquidity issues in the rearview, management can refocus on executing on a large and growing renewable energy opportunity set."
- Axiom's Gordon Johnson, a solar uber-bear, remains more cautious on SunEdison. He sees the deals announced yesterday increasing the company's debt balance by $196M and forecasts 17.8% equity dilution.
- Prior SunEdison coverage