Despite Upgrade & Buy Rating, American Superconductor (AMSC) Whacked Again

American Superconductor (AMSC) continued selling off today following its strong earnings report.  Traders obviously don’t believe it was a strong enough report to support the high valuation and so the stock drops into a much needed base.  It looks to me like it’s headed to that 200 day moving average just below the $32 level.

The selling continues today despite two upgrades – from Janco Partners and Brean Murray.

Janco upgraded the stock from Market Perform to Accumulate and raised the price target from $35 to $40.  Hat tip to Street Insider for the following analyst comment:

“The company reported its Q3’09 results yesterday before the market opened, both top and bottom line results exceeded our own and consensus estimates…We expect backlog deterioration to be minimal next quarter due to the announced $70 million contract from Shenyang Blower Works. We are inching up our FY2010 estimates to revenues of $421.1 million translating into non-GAAP EPS of $1.16 from revenues of $418 million and non-GAAP EPS of $1.15. This largely incorporates our unchanged outlook while incorporating a slightly increased 2MW unit ship in 2H 2010 to account for the large contract from Shenyang Blower Works. We are increasing our TEV/Sales valuation multiple from 3.5X to 4.X, which represents a slight increase from the most recent four quarter average of 3.85X…At these levels we are more constructive on the stock. An 18.8% sell off since the near-term high of $43.95 on 1/8/2010 provides a better entry point. Therefore we are raising our rating to an Accumulate given the potential upside to our price target of 12.1%.”

Brean Murray affirmed its Buy rating and raised the price target from $42 to $44. They also raised the fiscal year 09 EPS estimate from .60 to .65 and the full year 2010 EPS estimate from .90 to $1.15

Shares of AMSC are down another 7% today with very heavy volume.

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