AmTech Cuts Price Target on Yingli (YGE) to $6; Maintains Buy
American Technology Research lowers its price target on Yingli Green Energy Holdings (NYSE: YGE) from $12 to $6, but the firm maintains a Buy rating.
The firm cites "continued financing uncertainty" and believes that when Yingli reports Q3 results, it will guide its average selling price reductions similarly to its peers. Consequently, AmTech lowered its Q4 and Q1 ASP estimates on Yingli to down 20% sequentially for each quarter. The firm also points out that the Euro's sharp decline over the last several months has "exacerbated the blow of a severe drop-off in Spanish demand."
Despite the near-term headwinds, AmTech believes that Yingli is currently in a better position, relative to peers, to maintain margins in the first half of '09 "given its liberal use of the spot market to fulfill raw material needs."
AmTech cut its Q4 and FY09 EPS estimates from $0.23 and $1.49 to $0.00 and $0.69, respectively. Further, AmTech moved its estimate for Yingli's Q4 sales move from $307.2 million to $247.4 million and its FY09 sales estimate from $1.8 billion to $1.4 billion.
The firm said its $6 price target is based on 8x its new FY09 EPS estimate of $0.69. With shares of Yingli trading around $3.81 today (down 8.8%), AmTech's price target represents potential price appreciation of 57% from current levels.
Yingli Green Energy Holding Company Limited and its subsidiaries engage in the design, development, marketing, manufacturing, installation, and sale of photovoltaic (PV) products.
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