Our EquityAnalytics department is always updating price targets and ratings on companies that we cover based on new information. Our price targets and ratings are thoroughly researched and use financial analysis tools to determine stock prices.
Today, we are updating the following companies in our coverage: Salesforce.com (NYSE:CRM), Netease (NASDAQ:NTES), SunPower (NASDAQ:SPWR), Trina Solar (NYSE:TSL), Wal-Mart (NYSE:WMT), and Yingli Green (NYSE:YGE). The chart below shows the new ratings, price targets, and buy/sell ranges versus old ones:
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CRM: Upgrade from Sell to Hold, Increase PT from $117 to $120
Salesforce.com got an upgrade from Sell to Hol due more to price correction over a lot of changes in the company's outlook. We continue to believe the company is still overvalued at this time. We did slightly increase our price target as we increased our expectations for the company. We also decreased the tax rate as well for the company. Capital expenditures continue to grow at very strong levels, however; that kept our price target in check. Overall, we believe the company's multiples are extremely high, and even in a best-case scenario, CRM looks overpriced.
Netease: Maintain at Hold, Increase PT from $60 to $72
Netease is looking quite attractive right now as a great way to play growth in China. We believe it is the best gaming company in a country that has great growth potential for its internet and electronics, which both will help Netease. The company had a great quarter. The company's results outpaced our expectations and we upped our expectations for the company through 2015. We also saw a strong increase in free cash flow, which is a great sign of growth potential without taking on large debt levels. In fact, NTES has no debt at all. A healthy company with great balance sheet, sitting in the cross-hairs of Chinese growth.
SunPower: Upgrade from Hold to Buy, Increase PT from $7 to $8
The entire solar industry is definitely in a tough spot right now, but the market is also pricing literally nothing for these stocks. SPWR has a future PE below 10. Further, the recent tariffs put in place for the USA will help SPWR be able to take advantage of the solar market here at home. We upgraded the stock as it continues to weaken and is showing a lot of value at this point. The company saw an upgrade as a decrease in debt and increase in expectations outweighed a decrease in cash and increase in capex.
Trina Solar: Maintain at Buy, Decrease PT from $17 to $9
We continue to believe TSL is one of th best companies in the solar industry, but even the best are feeling the pain of this market. We reduced our expectations significantly for TSL, but we still believe it is a very solid company. The company became one of the best names in the industry due to its ability to create highly efficient cells at cheaper rates. As prices came down, TSL suffered. We still believe it has one of the best names in the industry with strong management, and if one is willing to wait on this one, we believe it will come out very strong.
Wal-Mart: Maintain at Buy, Increase PT from $80 to $86
Wal-Mart continues to look great. We upped our price target after another strong quarter that outpaced our expectations. The company is winning back customers well with ideas like "Pay with Cash" and a rededication to lowering prices to attract customers. We upped our price target with increased expectations, as well as strong increase in cash holdings that increased equity value. We believe the company is maintaining margins well, and WMT looks like a great investment for the second half of 2012. With uncertainty, we continue to like discount retail.
Yingli Green: Downgrade from Buy to Sell, Decrease PT from $7 to $0
Yingli Green had a disastrous last quarter, which made us completely remove any expectations for the company. We do not see positive cash flow coming in for YGE until 2015 right now, which makes us believe it has basically no equity value at all. Shipments were up in the latest quarter, but losses grew. The company has no margin leverage, and we have always believed it was one of the weaker companies fundamentally in the sector with lots of debt, no FCF, and poor management scores. Module shipments have been strong, but the debt levels are so much higher in comparison to the company's competitors... We see no value.