Monday’s FY Q3 earnings report from Energy Conversion Devices (NASDAQ:ENER) has triggered some jockeying for position among the analysts who follow the solar stock. Two formerly bearish pundits have now taken a more neutral stance; and one former bull is stepping away from the stock for now.
- Barclays Capital analyst Vishal Shah Tuesday raised his rating on the stock to Equal Weight from Underweight, with a new price target of $17, up from $10. “Although near-term remains “challenging,” he writes, “we believe shares are now fully discounting the bad news and downward estimate revisions may now likely be coming to an end.” He says risk/reward on the stock is now more balanced “as near term fundamental concerns are likely offset by potential for share gain in niche BIPV segment and significant focus in cost reduction.”
- Citigroup’s Timothy Arcuri likewise raised his rating on the stock to Hold from Sell, while upping his target to $16, from $13. “We have long argued ENER is a price taker rather than a price maker, and as such, was subject to the same industry supply/demand dynamics as virtually all other vendors, he writes. “With this [quarter], we are finally seeing more dour pricing commentary and capitulation on production to preserve cash, which to us signals dead money.” He adds that “downside from here will be harder to come up,” and that risk/reward is “balanced enough to finally justify a neutral stance.”
- Credit Suisse analyst Satya Kumar ends up in the same place, from a different direction: he downgraded his rating ot Neutral from Outperform, with a price target cut to $14, from $17. Kumar says competition is driving lower growth, and that pricing remains under pressure. He slashed his EPS estimate for the June 2009 fiscal year to 46 cents, from 72 cents; for FY 2010 he goes to a loss of 29 cents, from a profit of 84 cents.
ENER Tuesday is up 83 cents, or 5.2%, to $16.79.