Collins Stewart Cuts Price Target & Estimates on ReneSola (SOL) Due to New Guidance & Trends
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Price: $1.94 --0%
Rating Summary:
6 Buy, 3 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
6 Buy, 3 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Collins Stewart is reiterating its Hold rating on shares of ReneSola Ltd. (NYSE: SOL), but is lowering its price target from $6.50 to $3.60 following updated guidance from management.
The company released new Q2 guidance which called for revenue in the range of $235-$245 million, down from $280-$300 prior. The firm notes that the miss is due to low wafer prices and shipment volumes. SOL cut its wafer shipment expectations to 290MW-300MW from 330MW-350MW. Gross margin guidance was dropped to 17-19 percent, well below its original of 25-27 percent.
As a result of the company's new guidance, the firm cut its Q2 revenue estimate to $241 million from $284 million. It forecasts wafer shipments of around 230MW with gross margin of 17.7 percent. EPS is now expected to be $0.03, a fraction of its prior estimate of $0.36 and the Street's of $0.32.
Collins Stewart does not believe that SOL will be able match the pricing of GCL Poly Holdings in the coming quarters and is lowering its CY11 revenue and EPS estimate to $1.08 billion and $0.70 from $1.23 billion and $1.40 to go inline with these new beliefs. The Street is currently estimating $1.26 billion in revenue and $1.60 in earnings for fiscal 2011.
The firm cut its CY12 estimates to $1.044 billion with EPS of $0.60 from $1.353 billion and $1.32. The Street is looking fro $1.34 billion in revenue and EPS of $1.53.
An analyst at Collins Stewart comments, "Recent checks suggest only a subdued demand recovery in 3Q11, with wafer prices remaining under severe pressure. Due to overcapacity in the highly commoditized segment of the solar supply chain, we find the wafer segment unattractive from an investment standpoint. From a longer-term perspective, SOL has a good cost structure to process wafers, but will need its polysilicon facility under construction to be successful in CY12."
For more ratings news on ReneSola Ltd. click here and for the rating history of ReneSola Ltd. click here.
Shares of ReneSola Ltd. closed at $4.71 yesterday.
The company released new Q2 guidance which called for revenue in the range of $235-$245 million, down from $280-$300 prior. The firm notes that the miss is due to low wafer prices and shipment volumes. SOL cut its wafer shipment expectations to 290MW-300MW from 330MW-350MW. Gross margin guidance was dropped to 17-19 percent, well below its original of 25-27 percent.
As a result of the company's new guidance, the firm cut its Q2 revenue estimate to $241 million from $284 million. It forecasts wafer shipments of around 230MW with gross margin of 17.7 percent. EPS is now expected to be $0.03, a fraction of its prior estimate of $0.36 and the Street's of $0.32.
Collins Stewart does not believe that SOL will be able match the pricing of GCL Poly Holdings in the coming quarters and is lowering its CY11 revenue and EPS estimate to $1.08 billion and $0.70 from $1.23 billion and $1.40 to go inline with these new beliefs. The Street is currently estimating $1.26 billion in revenue and $1.60 in earnings for fiscal 2011.
The firm cut its CY12 estimates to $1.044 billion with EPS of $0.60 from $1.353 billion and $1.32. The Street is looking fro $1.34 billion in revenue and EPS of $1.53.
An analyst at Collins Stewart comments, "Recent checks suggest only a subdued demand recovery in 3Q11, with wafer prices remaining under severe pressure. Due to overcapacity in the highly commoditized segment of the solar supply chain, we find the wafer segment unattractive from an investment standpoint. From a longer-term perspective, SOL has a good cost structure to process wafers, but will need its polysilicon facility under construction to be successful in CY12."
For more ratings news on ReneSola Ltd. click here and for the rating history of ReneSola Ltd. click here.
Shares of ReneSola Ltd. closed at $4.71 yesterday.
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