Merrill Lynch Declares Cyclical Bottom In Solar ; Bank of America Upgrades JASO, TSL; ENER Gets Buy Rating

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12:44:52 am on February 11, 2009

Are the tides turning for the solar industry?  After months of doom and gloom forecasts, downgrades and price target cuts some upgrades and positive notes are beginning to slowly trickle in from analysts.  Ah oh, time to sell! 

Barron’s reported today that Merrill Lynch came out with a report today saying that improving second derivative trends suggest the industry is headed for a cyclical bottom.  They went on to say that while demand won’t recover until 2010 solar is at a “shipment bottom”.  “Our research suggests that some Asian vendors may forecast flat-to-rising shipments, suggesting inventory is peaking and depletion is underway, thanks to swift production cut backs, signs of easing in solar project financing and solar ASP declines.”

Here are Merrill’s new ratings:

Trina Solar (TSL) Upgraded to Buy from Neutral, with $14.30 price target.

JA Solar (JASO) Upgrades to Neutral from Underperform, with $3.80 price target.

ReneSola (SOL) Downgraded to Neutral from Buy, with $4.53. target.

Yingli (YGE) maintains Buy rating

China Sunergy (CSUN) maintains Buy rating

Suntech (STP): maintains Underperform rating


According to Bank of America (BAC) upgraded both Trina Solar (TSL) and JA Solar (JASO), to Buy and Neutral respectively.


Piper Jaffray upgraded Energy Conversion Devices (ENER) to BUY this morning and increased the price target from 25 to 33 for 3 reasons:

1) greatest exposure to strength in France and Italy
2) prime beneficiary of pending US federal/state legislation
3) ASP declines are less pronounced than anticipated.

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Please begin coverage of US based high-speed rail companies which may get $8B from the stimulus bill. Thanks


thanks for the suggestion Robert. Unfortunately, I’m not aware of any publicly traded US companies that offer high speed rail. The US lags far behind other countries in this mode of transportation.

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