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Needham & Company Maintains a 'Buy' on LDK Solar (LDK); Preannounced Weak 2Q11

August 19, 2011 8:09 AM EDT Send to a Friend
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Price: $1.01 --0%

Rating Summary:
    2 Buy, 3 Hold, 11 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 9 | Down: 11 | New: 43
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Needham & Company maintains a 'Buy' on LDK Solar (NYSE: LDK) price target lowered from $8.00 to $6.50.

Needham analyst says, "Yesterday after market close, LDK preannounced 2Q11 results. While we were expecting a weak 2Q11 as we wrote in our August 8th note, the magnitude of the reduction was still surprising. Clearly, LDK was suffering from weaker demand coupled with substantial pricing pressure within the quarter. We believe the challenging business environment will continue into 2H11, making the back-end loaded 2011 guidance look risky. However, with after-hour sell-off, we believe the stock is now valued at a discount to peers. In the near-term, we believe investors will remain cautious on LDK due to its highly leveraged balance sheet and declining margins. However, we believe the local Chinese government will continue to support LDK, preventing a default, and there is hidden value in its polysilicon plant which could be realized through an equity offering."

"We lower 2011 EPS to $0.53 and 2012 to $0.00 from $1.43 and $0.40, respectively."

For more ratings news on LDK Solar click here and for the rating history of LDK Solar click here.

Shares of LDK Solar closed at $6.57 yesterday.




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