Equity Insights: Oppenheimer Weighs In on SolarCity Corp (SCTY) and Cisco Systems,Inc. (CSCO) Ahead of Earnings

SolarCity Corp

Oppenheimer analyst Colin Rusch provides pre-earnings comments ahead of SolarCity Corp’s (NASDAQ:SCTY) earnings report on May 9th. Rusch reiterated an Outperform rating with a price target of $54.

Rusch begins by noting that SCTY’s small price increase strategy may change given that the extension of the ITC eliminates one of the obvious levers for driving sales. He will continue to look for evidence consistently effective sales post-ITC extension. Further, Rusch is expecting to see some equipment cost benefit in 1H:16 as suppliers on modules and inverters are working hard to maintain share for the company. Rusch would also not be surprised by a mid-year price reduction from inverter supplies as modules that avoid import duties become more available.

Rusch awaits an update on the Silevo factory ramp and financing for the facility. He expects to see hurdles for the new plant due to potential fraud in Gov. Cuomo’s economic development program in the region. Rusch continues to look for additional details on how this project will progress in the near future.

The analyst concludes by highlighting SCTY’s recent joint filing in New York, collaborating with six investor-owned utilities, SUNEQ, and SPWR, which may suggest a compromise path forward on net metering. Net metering would mean that distributed resources have a clear value and existing customers are protected. DG developers/owners, however, will gradually become more responsible for support payments to the grid.

According to TipRanks which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Colin Rusch has a yearly average return of 11.7% and a 48% success rate. Rusch is ranked #384 out of 8959 analysts.

Out of the 13 analysts polled by TipRanks (in the past 3 months), 7 are Bullish on SolarCity Corp’s stock, while 5 remain Neutral on the stock and 1 analyst is Bearish. With a potential upside of 71.83%, the stock’s consensus target price stands at $45.45.

Cisco Systems, Inc.

Analyst Ittai Kidron of Oppenheimer is bullish on Cisco Systems, Inc. (NASDAQ:CSCO) ahead of their earnings release on May 18th. Kidron reiterated an Outperform rating and provided a price target of $30.

Kidron’s July quarter checks suggest in-line guidance at best with downside risk more likely. Despite overall positive checks, they were a bit weaker than past years. Additionally, he believes the consensus view does not appropriately account for the QoQ loss of a week of activity.

The macro drop remains a concern as GDP estimates were lower in almost every major country and the US dollar weakened against major most currencies during the quarter. Despite the challenges faced, Cisco shows strong growth trends in China/India and the growth has been conservative in the company’s emerging market outlook.

Kidron expects to see a better product outlook as Cisco’s switching businesses suggest stability despite weak campus demand at the beginning of the year. Kidron’s checks point to improved demand for UCS (unified computing system) and security, which is key to Cisco’s ability to drive growth.  Further, the improvement in data center demand is consistent with commentary from supply chain companies.

Out of the 24 analysts polled by TipRanks (in the past 3 months), 18 analysts rate Cisco stock a Buy, while 5 remain Neutral and 1 analyst rates the stock a Sell.  The stock’s consensus target price is $29.24, marking a potential upside of 8.86%.


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