Analyst Notes Weekly Review: First Solar (FSLR), Suntech Power (STP), LDK Solar (LDK), ESCO (ESE), JA Solar (JASO), Casella Waste (CWST), ReneSola (SOL)

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01:31:04 pm on January 18, 2009

I’m back from vacationing in Troncones, Mexico and looking forward to bringing you the latest in alternative and renewable energy stocks in the coming year!  Thanks for all the comments from visitors in the 6 months since this site was launched. . my goal is to continue to push forward and make GreenStocksCentral.com the #1 source for breaking news and tracking of green stocks with an increasing number of analysis coming in 2009. 

With that said, thanks to Alison for doing a fantastic job of keeping up with the news while I was gone.  I know it’s not an easy job!  I’ll have just a few posts this weekend to round it out and get ready for next week which will be highlighted by Obama’s inauguration speech on Tuesday.

I’ll start with a summary of all the analyst notes for the past week which include upgrades and downgrades.

The Upgrades

(1.15.09) LDK Solar (LDK) upgraded to Hold from Sell by Lazard.  Firm maintains $12 price target.

(1.15.09) Suntech Power (STP) upgraded to Buy from Hold by Lazard. 

Maintaining

(1.15.09) Gabelli Maintains Bullish rating on First Solar (FSLR).  The firm remains confident in their estimates for FSLR for 4Q ’08, $435mm revenues and EPS of $1.37, as well as for FY ’09, EPS of $8.00, and continue to recommend the purchase of shares at current level.

(1.15.09) Deutsche Bank Maintains Buy rating on ESCO Technologies (ESE) and calls it the top green tech pick.  Firm has price target of $42. According to StreetInsider.com, the DB analyst said, “We encourage investors to accumulate shares of ESCO Technologies as there are several near-term catalysts that can drive shares higher over the next 6 months, including 1) a win at SoCal Gas, 2) a major pilot with a Latin American utility and 3) news flow about traction at TEPCO following DistribuTECH.”

The Downgrades

(1.13.09) First Solar (FSLR) downgraded by Citi from Buy to Hold.  According to StreetInsider.com, Citi believes FSLR is best in class but a bit overdone having run up 60% off the lows.  They are concerned about 1) near-term inventory risk, 2) secular margin (and thus stock multiple) compression, and 3) sector supply overhang that is apt to persist through 2010 even in the face of forthcoming government stimulus package

(1.14.09) Suntech Power (STP) downgraded by both FBR and Broadpoint.Amtech.  Amtech downgraded based on the big rally off the lows heading into a difficult solar earnings period and believes STP will not be able to improve its balance sheet for some time. 

According to StreetInsider.com, the firm believes Suntech “will be one of the long-term survivors in China given its scale but considering the balance sheet overhang and the risk of further estimate revisions” does not feel the stock should be trading at a premium valuation (trades at 13x FY09 estimates, compared to the group average of 6-7x).

(1.14.09) JA Solar (JASO) downgraded by Broadpoint.Amtech to Neutral.  Again the firm is downgrading based on valuation after a near doubling of the stock off the lows. 

(1.15.2009) Casella Waste Systems (CWST) downgraded to Neutral by JP Morgan

(1.16.09) Renesola (SOL) downgraded from Overweight to Equalweight by Morgan Stanley

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According to StreetInsider.com, Gabelli commented on Obama’s American Recovery and Reinvestment Bill of 2009 which could result in an $80 billion infusion into green industries such as smart grids, electric vehicles, wind, solar, geothermal and general energy efficiency.   The firm said, “$10b in solar project spending could account for nearly 1500GW of solar installations over the next two years — furthermore, we expect a portion of the Renewable Energy Loan Guarantees to boost the solar industry by perhaps another 500MW.” The firm recommends investors own First Solar (FSLR) and SunPower (SPWRB, SPWRA).

The firm indicated other beneficiaries might include:

Ormat (ORA), Vestas Wind Systems (VWDRY), Nordex (NDX-GR), General Electric (GE), American DG Energy (OTCBB: ADGE), WaterFurnance Renewable Energy (WFI.T), Badger Meter (BMI), Itron (ITRI) and Esco (ESE), Northeast Utilities (NU), Allegheny Energy (AYE), Edison International (EIX), American Electric Power (AEP), NSTAR (NST), National Grid Group (NGG), and ITC Holdings (ITC), Layne Christensen (LAYN) and Tetra Tech (TTEK).

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