Analysts Aren't Pleased With SunEdison

The shareholders that are dumping Sunedison Inc SUNE after the company announced it is suspending dividend payments on its preferred shares aren’t the only ones fed up with the company. In a series of new notes, several Wall Street analysts have also lost patience with Sunedison. Here’s a look at what they had to say.

Macquarie
Analyst Angie Storozynski calls the dividend cut the “last straw” and downgraded Sunedison from Outperform to Neutral.

“SUNE’s complex financial disclosures make it seemingly impossible for us to accurately assess its liquidity position, but the dividend move signals that SUNE is clearly facing a liquidity crunch,” she adds.

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Credit Suisse
Analyst Patrick Jobin says that recent reports that Sunedison may be forced to back out of its Vivint Solar Inc VSLR buyout offer both good news and bad news for Sunedison. “A potential deal breakup could be a positive for the SUNE complex, as it would help preserve cash in the short-term, while damages from a potential VSLR lawsuit would be difficult to estimate,” he explains.

Credit Suisse maintains a Neutral rating and $3 target for Sunedison.

J.P. Morgan
Analyst Paul Coster believes that the suspended preferred dividends, reports of banks withholding funding for the Vivint deal and Sunedison’s delayed 10K filing mean “a growing likelihood that SUNE will trigger a negative credit event.”

J.P. Morgan has withdrawn its $5 price target and maintains a Neutral rating on Sunedison.

Axiom
Analyst Gordon Johnson saw trouble on the horizon for Sunedison weeks ago. Back on Feb. 16, Johnson wrote, “We believe some may be fearful that SUNE is more cash strapped than meets the eye.”

Unfortunately for shareholders, recent developments indicate that Johnson’s observations seem to be on target.

Disclosure: the author holds no position in the stocks mentioned.