Deutsche Bank analyst Vishal Shah came out today with a few insights on Sunedison Inc (NYSE :SUNE), following the news that the solar energy company has terminated its deal to buy a 15.87% stake in Brazilian sctor player Renova Energia. The analyst sees this termination as an incremental positive.
Shah commented, “The potential liability on the second part of the Renova transaction still exists (which is a max of $105M or ~$90M assuming current FX rate and GLBL shares decline to $0). Based on current GLBL share price, we estimate the cash impact to be ~$40-50M with cash outflow in March 2016 timeframe. More importantly, this announcement shows that SUNE mgmt is successfully executing on the near term strategy it has outlined to investors and gives us confidence that mgmt would be able to avoid the worst case scenario currently embedded in shares and renegotiate/close both Invenergy and Vivint transactions without significant liquidity impact.”
Shah reiterated a Buy rating on shares of SunEdison, with a $9.00 price target, which represents a potential upside of 152% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Vishal Shah has a total average return of -21.0% and a 23.4% success rate. Shah has a -49.2% average return when recommending SUNE, and is ranked #3636 out of 3644 analysts.
Out of the 15 analysts polled by TipRanks, 11 rate SunEdison stock a Buy, 2 rate the stock a Hold and 2 recommend Sell. With a return potential of 341%, the stock’s consensus target price stands at $15.75.