Renesola (SOL) Gets Piper Downgrade, Credit Suisse Upgrade

Surprisingly, Credit Suisse is out upgrading Renesola (SOL) from Neutral to Outperform despite a tough quarter for the company.  Piper Jaffray is downgrading SOL from Neutral to Underweight and lowering the price target from $6 to $4.50.

Hat tip to StreetInsider for the following analyst comment from Piper:

“We believe Renesola is making the right moves by vertically integrating downstream to cells/modules. Failure to integrate downstream, in our opinion, would result in anemic margin and eventual share loss to integrated poly incumbents, customers that are now processing wafers internally, and smaller ingot/wafer competitors that are quickly adding leading edge wafer capacity thanks to low barriers to entry and equipment suppliers eager to develop new customers. We believe entry barriers to ingots and wafers are lower than cell processing and naturally polysilicon production. Further, we believe SOL’s polysilicon plant may be a drag on the company’s earnings, balance sheet, and ROIC as it ramps over many quarters.  While we believe company management can navigate a difficult course ahead, we believe its potential share appreciation will trail that of vertically integrated and cell-only companies in China and thus downgrade shares of SOL to Underweight.”

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