FLASR Inc. (fka FLSR)

[NMBR1]

HERE IS THE NEWS YOU ASKED FOR
8Point3 Energy Is Fairly Valued In The Event Of A Sale, Says JPMorgan

1/9/18, 3:06 PM
January 9, 2018 03:06 PM ET (BZ Newswire) -- Analyst Color

8Point3 Energy Partners LP (NASDAQ:CAFD) was initially founded as a joint venture yieldco between First Solar, Inc. (NASDAQ:FLSR) and SunPower Corporation (NASDAQ:SPWR) with the intention of buying solar assets from both entities and then paying up to 80 percent as a dividend. But now that First Solar is looking to sell its 28-percent stake in 8Point3 and SunPower is also looking to sell a 37-percent stake investors are left wondering what happens next.

The Analyst

JPMorgan's Mark Strouse assumed coverage of 8Point3's stock with a Neutral rating and $16 price target versus the firm's prior coverage with an Overweight and $16 price target.

The Thesis

Three potential outcomes exist for the solar company in Strouse's view:

A new sponsor acquires a majority stake (35 percent probability).
8Point3 is fully acquired (45 percent probability).
No deal occurs (20 percent probability).
Nevertheless, the stock will remain a high-quality and low-risk choice for yield investors, the analyst said.

"We believe there is a less than 50-percent chance that 8Point3 receives a new sponsor and remains an independent company, allowing shareholders to participate in future gains, while there is a greater than 50-percent chance that either 8Point3 is wholly acquired or a deal fails to materialize, in which case the stock seems appropriately valued," Strouse said.

The case for further upside could be found in the event that a well-capitalized sponsor assumes a majority stake and the Street reacts with positive revisions to estimates, according to JPMorgan.

Price Action

Shares of 8Point3 were trading lower by nearly 4 percent Tuesday afternoon.

Related Links:

8Point3 Downgraded On Increasing Concerns Regarding Its Future

Gordon Johnson On 8Point3: There Are A Lot Of Similar Characteristics To SunEdison, SolarCity

Copyright © 2018 Benzinga (BZ Newswire, http://www.benzinga.com/licensing). Benzinga does not provide investmentadvice. All rights reserved. Write to [e-mail] with any questions about this content. Subscribe to Benzinga Pro (http://pro.benzinga.com).

© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.