Piper Jaffray Reiterates on SunEdison on Significant Upside Ahead

In a report published Thursday, Piper Jaffray analyst Jagadish Iyer reiterated an Overweight rating and $17.00 price target on SunEdison (NYSE: SUNE).

In the report, Piper Jaffray noted, “Post 3Q13 results, it is evident that SUNE's semi business profitability is putting a dent in overall profitability. We believe post Semi spin off, Opex should trend lower thereby enabling the Solar business to achieve 10% Op. Margin on a 250MW run rate/qtr. Our Sum of the parts analysis reveals that SUNE could be worth $22 on a baseline scenario and $31 in a very optimistic one, if they can flawlessly execute to a plan i.e.driving y/y growth in projects, project selection, Semi business spin off and launching the YieldCo. With a new business model evolving in terms of holding balance sheet projects to capture $1.23/Watt in incremental value from cost of capital, underwriting assumptions and residual value of projects, we believe SUNE is poised to monetize its solar project business even more effectively driving steady cash flow stream besides robust y/y revenues and earnings growth. Reiterate OW, $17 PT.”

SunEdison closed on Wednesday at $11.22.