Zacks Investment Research upgraded shares of SunEdison, Inc. (SUNE) from UNDERPERFORM to OUTPERFORM on October 16, 2014, with a target price of $18.00.
We upgrade SunEdison shares to Outperform as the company swung to profit in the second quarter. We think that the growth in revenues and earnings is encouraging although we recognize that the higher operating expenses remain a concern. We believe the strength in the solar business will continue, driven by increasing global demand for solar energy. The divestment of the semiconductor business will enable it to concentrate on its core competencies. Moreover, its recent partnerships and cost reduction initiatives are expected to expand margins. Nonetheless, the pricing environment and a highly leveraged balance sheet remain concerns for the company. Competition from its peers is also a headwind.
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