Goldman Sachs Downgrades Yingli Green Energy (YGE) to Sell

June 26, 2012 7:08 AM EDT
Get Alerts YGE Hot Sheet
Price: $2.75 --0%

Rating Summary:
    4 Buy, 15 Hold, 7 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 7 | Down: 10 | New: 7
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Goldman Sachs downgraded Yingli Green Energy (NYSE: YGE) from Neutral to Sell with a price target of $2.00 (from $4.00) citing a "worsening balance sheet with a cyclical trough yet to arrive.:

The firm notes that from 3Q11 to 1Q12, the company's net debt to equity ratio increased from 71% to 150%. This balance sheet will be stretched further following the successfully issued Rmb1.5 bn of medium-term onshore notes. The is compounded as the comapny reiterated its US$400 mn capacity expansion plan to add 750MW multi wafer to module capacity in 2012.

Goldman said they are concerned about YGE's business strategy in an extremely challenged industry. The comapny's 100% vertically integrated business model "does not appear to be providing the differentiation and value-added impact the company needs in a structurally changed industry."

For an analyst ratings summary and ratings history on Yingli Green Energy click here. For more ratings news on Yingli Green Energy click here.

Shares of Yingli Green Energy closed at $2.82 yesterday.

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