In a research report released today, Roth Capital analyst Philip Shen reiterated a Buy rating on shares of SolarCity Corp (NASDAQ:SCTY) with a price target of $98, after hosting investor meetings with Aaron Chew, VP of Investor Relations. With the recent selloff in shares, the analyst sees current levels as an attractive entry point and recommend buying SCTY shares.
Shen wrote, “As we saw during the Great Recession, when all capital markets freeze up, one could say there will be bigger problems to deal with. Barring this type of systemic dysfunction that would impact every type of company in the entire economy, we believe SCTY can manage through the current market challenges well. SCTY has three primary sources of funding: (1) Tax equity; (2) Revolvers and aggregation facilities; and (3) ABS. Tax equity is very much available: So long as corporations have profits, and they currently do with companies posting record profits.”
The analyst continued, “We continue to see liquidity in the marketplace and fears of rate hikes may now be overblown with the 10 year Treasury yield going lower. As for asset-backed securitizations, recall during the recent tumult of the yieldco market selloff, SCTY priced its latest securitization ($125mn) at an attractive blended ~4.5% rate, highlighting the company’s access to this market.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Philip Shen has a total average return of -19.5% and a 19.4% success rate. Shen has a -19.4% average return when recommending SCTY, and is ranked #3714 out of 3730 analysts.
Out of the 13 analysts polled by TipRanks, 10 rate SolarCity stock a Buy, while 3 rate the stock a Hold. With a return potential of 82%, the stock’s consensus target price stands at $79.42.