U.S. markets are trading sharply lower today as investor sentiment was curbed by more declines in the oil price. Among the equities in focus are renewable energy company Sunedison Inc (NYSE:SUNE) and networking company Ciena Corporation (NYSE:CIEN). Lets take a look and see what the analysts have to say about SUNE and CIEN.
Deutsche Bank analyst Vishal Shah reiterated a Buy rating on shares of SunEdison, with a $9.00 price target, after the company announced that it would sell its Bingham and Oakfile wind farm assets for $209 million to an equity partnership that the company formed with JP Morgan Asset Management’s institutional investor clients.
Shah commented, “~$2.36/W total sales price is likely higher than expected, and assuming SUNE receives margin of 10-35 cents, the company could generate ~30-115M of cash profit. Total JPM Warehouse size is ~$650M equity, which implies that up to ~700MW of additional assets could be dropped to the warehouse at current valuations and leverage ratios.”
The analyst continued, “Clear evidence of warehouse utilization should further increase market confidence in SUNE’s ability to utilize diverse capital sources and generate near term cash flows to offset liquidity concerns. While warehouse sales are consolidated in financial statements, Q4 appears to be shaping up well from a cash generation and financing perspective.”
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 -18.8% and a 23.3% success rate. Shah has a -34.5% average return when recommending SUNE, and is ranked #3622 out of 3638 analysts.
Out of the 13 analysts polled by TipRanks in the last 3 months, 8 rate SunEdison stock a Buy, 3 rate the stock a Hold and 2 recommend a Sell. With a return potential of 184.09%, the stock’s consensus target price stands at $11.96.
In a report issued yesterday, BMO Capital analyst Tim Long reiterated an Outperform rating on shares of Ciena, while reducing the price target to $25 (from $30), after the company provided a disappointing outlook for revenue. Ciena shares tumbled nearly 20% since the announcement.
Long noted, “Clearly the revenue guide down is disappointing. That said, we are encouraged by the steady operating margin improvement at Ciena. The company just completed its fifth consecutive year of profitability, and previously had never exceeded three. The 11% operating margin for the fiscal year is the highest in 15 years. We are sticking with the stock because we believe the Street underestimates the sustained nature of growth and operating margin improvements. Based on lower revenues, we are lowering our fiscal 2016 EPS estimate to $1.37 from $1.62, and are establishing a fiscal 2017 EPS estimate of $1.67.”
According to TipRanks.com, analyst Tim Long has a total average return of 4.6% and a 43% success rate. Long has a -17.1% average return when recommending CIEN, and is ranked #947 out of 3638 analysts.
Out of the 18 analysts polled by TipRanks, 15 rate Ciena stock a Buy, while 3 rate the stock a Hold. With a return potential of 43%, the stock’s consensus target price stands at $28.