Collins Stewart Previews Yingli (YGE) Q1 Earnings

May 14, 2008 10:48 AM EDT

Collins Stewart is out with a research note this morning previewing Yingli Green Energy's (NYSE: YGE) Q1 earnings, which are expected out before the market opens tomorrow morning (May 15). Yingli's conference call will start at 8 AM ET tomorrow.

Ahead of the earnings report, the firm maintains a Buy rating and $37 price target on Yingli, which represents potential upside of about 41% from today's most recent trade at $26.20. Notably, shares of Yingli are rising today on the back of solid earnings at ReneSola (NYSE: SOL). Yingli stock is up about 7% from yesterday's closing price of $24.34.

Collins Stewart expects Yingli to report Q1 revs of $201.1 million and EPS of $0.18, which is in-line with the Street estimates of $205 million and $0.18. The firm said these numbers were based on shipments of 51MW and an average selling price of $3.89/watt and believes Yingli will at least meet this shipment forecast and likely beat on the ASP assumption. Given this ASP assumption, the firm believes Yingli's previous gross margins guidance of 23-24.5% will be conservative.

The firm continues to expect a very positive solar market and sees Yingli reporting Q2 revs of $203 million and EPS of $0.20.

Collins Stewart notes that the market has recently been concerned with Yingli's supply of polysilicon, specifically the "price it is paying for this raw material." Given the announcement of two contracts with DC Chemical, the firm said Yingli should have "more than adequate silicon coverage for the year ahead..."

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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