The Country Caller takes a look at why SolarCity stock was up today
SolarCity Corp (NYSE:SCTY) stock has seen a lot of ups and down in the past few weeks. Analysts across the Street have mixed views regarding the stock; while some consider it to be a valuable stock with huge upside potential many consider it a failing stock.
In the most recent development on Thursday, analyst Ben Callo from Baird, had to say a lot of positives for the stock and upgraded the stock from a Neutral to an Outperform. The 12 month price target was maintained at $37 by Ben Kello. The sell side firm was impressed by the multiple financing transactions that the company has provided to its customers.
SolarCity in the past has mostly offered limited financing schemes to its consumers. But following a lot of criticism from famous personality such as Jim Chanos, the company has decided to bring some additions to its model. The company recently made additions to its MyPower Solar last week and decided to launch the revised scheme in 14 US states.
The recent additions come after leasing started to lose its popularity in the solar space. In a recent sell side report, Credit Suisse has also appreciated the initiative taken by SolarCity and has provided numerous benefits that the solar loans can provide as opposed to a solar lease. Ben Kello believes that these solar loans will help strengthen the company’s balance sheet.
In addition to the new solar financing techniques Benn Kello has also mentioned that the company’s net metering concerns have been overdone. The company to further support its balance sheet should issue equity. Ben Kello indicates that a module oversupply should also help reduce costs for the company.
Jim Chanos and others including Bank Of America Merrill Lynch have made a lot of criticisms over the company. While Chanos was unconvinced over the company’s business model, Bank of America was unimpressed with the recent financial results. The sell side firm also believed that the company’s policy of maintaining cost and growth side by side would pose a lot of problems.
But the recent loan announcement shows that the company is serious regarding turning over a new leaf. The loan as mentioned above is likely to support the company’s balance sheet and help address numerous other concerns. During pre-market trading today, the stock was up 4.51% at $23.07