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Roth is Buyer of JA Solar (JASO) Following Q3 Results; Affirms 'Buy' Rating

November 19, 2014 9:55 AM EST
Get Alerts JASO Hot Sheet
Price: $7.49 --0%

Rating Summary:
    5 Buy, 5 Hold, 8 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Roth Capital affirms JA Solar (Nasdaq: JASO) at Buy with a price target of $18 following Q3 results reported by the company on Tuesday morning.

Analyst Philip Shen offered the following overall commentary: JASO posted a strong Q3 beat and took up full year 2014 guidance. Q4 capacity has been fully booked, and over two thirds of Q1 production has already been allocated. The blended Q3 ASP was 63c/W and appears to be stable heading into Q4. With 3GW of effective cell and module capacity vs. our prior nameplate of 2.8GW, we adjust 2015 estimates up slightly on greater shipment volumes. Trading at just 3.4x our 2015E EBITDA vs. peer average of 8.0x, we continue to believe JASO is under-appreciated and undervalued given the company's strong execution, improving earnings strength, potential for $219mn of 2015 EBITDA, and leading balance sheet (net debt/cap of 24.3%). A catalyst ahead to watch is the potential resolution of the U.S./China trade case, the outcome of which could impact the location and size of JASO's international cell capacity.

Despite closing up ~9% postearnings, we would be buyers of JASO at these levels. To punctuate how undervalued its stock is, management established a $90mn stock buyback plan (compared with JASO's market cap of <$400mn), which serves as another near-term catalyst.

For an analyst ratings summary and ratings history on JA Solar click here. For more ratings news on JA Solar click here.

JA Solar closed at $8.49 yesterday.



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