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Analysts' Favorite Solar Stock for 2014

NEW YORK (TheStreet) -- SunEdison  (SUNE - Get Report) is analysts' top solar stock for 2014, as analysts see the St. Peters, MO-based company as best-positioned to benefit from an expected surge in demand for sun power.

Thirteen analysts rate SunEdison a "buy," compared to just three "hold" ratings and a single sell. That adds up to a consensus rating of 4.41 out of 5, according to Bloomberg's scoring system -- the highest of the 17 stocks in the Bloomberg Industries Solar LC Principal index.

By contrast, U.S. bellwether First Solar (FSLR - Get Report) garnered a lukewarm rating of 3.18, tenth on the list. The lowest-rated was German company Solarworld listed in U.S. over the counter markets under the ticker SRWRY with a market cap of just over $50 million. Its rating was just 1.29.

In listing SunEdison as a top alternative energy pick, Piper Jaffray analyst Jagadish Iyer cited "our outlook for global solar demand growth and several 2014 catalysts that should unfold over the next 12 months that we believe will provide compelling upside."

He expects global solar demand to grow 15% in 2014 and 11% in 2015. He is also looking forward to SunEdison's spin-off of its semiconductor business in the first half of next year, "allowing better focus on solar pipeline execution." He cited plans in early 2014 to spin off select projects into a separate, publicly listed company as another reason for bullishness.

The planned spinoffs are indications of why SunEdison has "the best strategy to monetize the significant growth expected in solar energy while many others may experience profitless prosperity," according another SunEnergy bull, RBC Capital Markets analyst Mahesh Sanganeria.

The lone "sell" rating on SunEdison comes from Eva Dimensions, a quantitative research firm. Piper Jaffray's Iyer cites execution missteps, semi cyclicality and governmental policies and regulations as potential pitfalls for SunEdison, while other analysts cite economic weakness as the greatest threat to the stock.

SUNE Chart
SUNE data by YCharts

-- Written by Dan Freed in New York

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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