Deutsche Bank Lowers Price Target on Yingli (YGE) to $17
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Deutsche Bank lowers its price target on Yingli Green Energy (NYSE: YGE) from $28 to $17. The firm maintains a Hold rating.
Following Yingli's Q2 earnings results, issued yesterday morning, the firm said it now sees more downside risks to earnings. As a result, Deutsche lowered its EPS estimates on Yingli's FY08, FY09 and FY10 by 15-40%, which now reflects "a weaker ASP, margin, and demand outlook." Also, with a recent decline in the Spanish solar market, Deutsche sees further ASP erosion, which will create pressure on shipments during '09.
Additionally, the firm mentions its concerns that "oversupply of polysilicon may intensify in 2H09 due to a material decline in the Spanish market." For the solar industry as a whole, Deutsche feels this could "lead to intensified pricing competition from new entrants and more ASP/margin pressure."
Deutsche said its $17 price target is based on 18x the firm's FY09 EPS estimate, which is below Yingli's historical average of 26x. The firm said this discount is warranted given Yingli's lower expected earnings growth of 49% for FY08-FY10, compared to 139% for FY05-FY07.
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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Comments
lol
"Deutsche said its $17 price target is based on 18x the firm's FY09 EPS estimate" So their FY09 estimate is for an EPS of $0.94 ?!?!?! ROFLMAO. Currently, the MEAN FY09 EPS estimate is for $1.78.... Furthermore, YGE recently announced they will have 600MW of production capacity before mid-2009, meaning even higher EPS! As well, silicon is soon to be in oversupply, which means pricing competition and LOWERING OF SILICON PRICES, which means it is ADVANTAGEOUS for YGE to NOT SECURE SILICON until 2009 when the prices come down. Morons, abusing power.
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I smell price manipulation
All these ramblings aside... Deutsche Bank is going to sit here and tell us that they are "NOT" lowering the price target in order to further manipulate the stock downwards so they can load up on it cheaper? B/S thats my call. How stupid do you think Investors really are? Dont be foolish.
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weird..
ML on Aug 7, 2008 05:20 PMTheir EPS for this year will be above $1.00 with 200MW of production. How will it be less than $1.00 next year for 600MW of production? Considering most other analysts just set price targets around double the current valuation....something smells fishy...