JPMorgan cuts HASI target, says 39% pullback overdone

JPMorgan lowered the firm’s price target on HASI to $37 from $45 and keeps an Overweight rating on the shares. The shares have declined 39% over the past two weeks, with many investor conversations comparing and contrasting the stock to NextEra Energy Partners’ (NEP) fallout and questioning the impact of “higher for longer” rates, the analyst tells investors in a research note. Unlike NextEra Energy Partners, HASI has no material debt maturities until 2025 and its base rate for that refinance has already been hedged, which when paired with rising yields on new projects, leads to “still good visibility” into medium-term returns, says the firm. Additionally, unlike NextEra, HASI is not a YieldCo with no dependency upon a parent company for growth, says JPMorgan. The firm believes the recent pullback is overdone and finds HASI undervalued at current levels.