UBS Maintains a 'Buy' on MEMC Electronic Materials (WFR); Announces Details of Major Restructuring

UBS maintains a 'Buy' on MEMC Electronic Materials (NYSE: WFR) price target lowered from $8 to $6.

UBS analyst says, "Big cutbacks in polysilicon and solar wafer capacity viewed positively: MEMC will idle its 6,000 metric ton (MT) polysilicon factory in Italy and only use its 9,000 MT poly factory in Texas. We estimate 4,000 MT will be used for semiconductors which leaves 5,000 MT for solar wafers (equivalent to 800MW). We believe it may be hard for its SunEdison unit to install 800MW of modules in 2012 (estimate 300MW installs in 2011) to match its poly capacity which suggests spot poly sales are possible. MEMC also lowered its Malaysia solar wafer capacity to 300MW (was 1.2GW) which helps keep maintenance capex at $120M/year."

"Lowering estimates on 4Q11 miss; cash generation in 2012 is a key focus: MEMC guided 4Q11 non-GAAP sales and EPS to $825M and $0.03 vs $980M and $0.10 previously. Our new 2012 and 2013 EPS are $0.50 and $0.75 vs $0.75 and $1.00 previously. MEMC targets a cash flow benefit from restructuring of $200M ($0.87/share) annually which would be a big positive."

For an analyst ratings summary and ratings history on MEMC Electronic Materials click here. For more ratings news on MEMC Electronic Materials click here.

Shares of MEMC Electronic Materials closed at $4.20 yesterday.

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