In a new note to client today, Credit Suisse downgraded SolarCity’s (SCTY) stock from ‘Outperform’ to ‘Neutral’ with a price target of $27.00 (from $38.00 previously) based on what it sees as an increased probability of the Tesla’s (TSLA) acquisition deal closing, which it estimates to be ‘grossly undervalued’.

Credit Suisse analyst Patrick Jobin is going against the grain here as most of his colleagues on Wall Street have portrayed Tesla’s proposed acquisition as “good for SolarCity, but bad for Tesla” since the company would be absorbing the solar installer’s debt, while SolarCity shareholders will get a premium on their stock’s market price which had significantly declined since the beginning of the year up to the announcement of the acquisition offer.

On the other hand, Jobin thinks Tesla is getting a deal at $2.8 billion for SolarCity, which he thinks is worth closer to $3.7 billion.

He writes in a note to clients:

“On deeper reflection of the proposed acquisition of SCTY by TSLA, and discussions with TSLA shareholders, we increase our probability of a deal being consummated at, or near, the proposed terms to 60-70% despite our concerns on corporate governance along with limited strategic and financial rationale for the transaction in the near-term. As a consequence, we lower our SCTY target price to $27 and downgrade our rating to Neutral to reflect the preliminary acquisition proposal at what now equates to ~$25.9-$27.8 per share at the 0.122x-0.131x exchange ratio presenting only limited upside from current levels (the actual mechanics of the proposal are not disclosed and no definitive agreement has been reached although there is apparently unanimous support from both boards). Note that our fundamental view that SCTY is grossly undervalued remains unchanged.”

We noted last week that while the deal appears to be almost universally hated in the financial analyst community, the hate is coming mostly from people who don’t own the stocks and the acquisition offer is actually getting support from shareholders.

As usual, we recommend taking analyst notes with a grain of salt. They are often successful in moving the stock price, but you always need to take things into perspective. Patrick Jobin is ranked #3,780 out of 3,990 analysts on Tip Ranks with a 32% success rate and an average return of -15.3%.

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