Piper Jaffray Reiterates $45 Price Target on Yingli (YGE)

August 6, 2008 2:05 PM EDT

Piper Jaffray reiterates its Buy rating and $45 price target on Yingli Green Energy (NYSE: YGE).

The firm believes Yingli should be "a core solar holding given that 1. it has the lowest processing cost in the industry, and 2. because it has the highest poly cost today, it is most levered to eventual spot poly price reduction that we anticipate in '09."

Despite very strong quarterly results which beat on all metrics, shares of Yingli are down more than 7% today. Piper believes the sell-off can be attributed to higher expectations being built into the stock, the fact that Yingli did not guide its second half substantially higher, and "that non cash f-ex loss prevented a large Q2 beat." In light of these concerns, the firm says it would still be a buyer of Yingli.

Piper also likes that Yingli appears to be diversifying away from Spain and into new markets such as Germany, Korea, Italy, France, Belguim, US and China.

With shares of Yingli trading around $15.75 today, the firm's $45 price target represents a potential gain of 200% from current levels.

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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