Wells Fargo Cuts Estimates & Valuation Range on Hanwha SolarOne (HSOL), Strong Balance Sheet Keeps Company Afloat
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Price: $1.09 -0.91%
Rating Summary:
0 Buy, 4 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
0 Buy, 4 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo is maintaining its Market Perform rating on shares of Hanwha SolarOne (NASDAQ: HSOL), but is reducing its valuation range from $5.50-$6.50 to $3.20-$3.60.
The company reported its second quarter results with $277.1 million in revenue and EPS of $0.12, roughly inline with the Street's estimates of $273 million and $0.12.
HSOL's shipments fell 17 percent quarter-over-quarter and gross margins were only in the single digits as the company tried to help preserve its balance sheet. The firm believes that Hanwha SolarOne has one of the strongest balance sheets in the industry as it only has $381 million in debt and $257 million in cash and cash equivalents.
Shipments are forecasted to grow over 20 percent in the second half of 2011 while pricing is likely going to continue to fall. Pricing is expected to fall in the high double-digits in the third quarter and is not predicted to rise again until the second quarter of 2012.
An analyst at Wells Fargo comments, "With a strong financial backer, what we view as a healthy balance sheet, and a growing brand, we believe HSOL will emerge as a stronger competitor once the industry exits the downturn. Still, near-term earnings power looks weak and we prefer component manufacturers with higher margin structures."
The firm likes Yingli Green Energy (NYSE: YGE) and Trina Solar (NYSE: TSL) over HSOL currently.
Wells Fargo cut its 2011 and 2012 EPS estimates from $0.68 and $0.92 to $0.01 and $0.43. Revenue for the two years is forecasted to be $1.186 billion and $1.207 billion.
For more ratings news on Hanwha SolarOne click here and for the rating history of Hanwha SolarOne click here.
Shares of Hanwha SolarOne closed at $3.86 yesterday.
The company reported its second quarter results with $277.1 million in revenue and EPS of $0.12, roughly inline with the Street's estimates of $273 million and $0.12.
HSOL's shipments fell 17 percent quarter-over-quarter and gross margins were only in the single digits as the company tried to help preserve its balance sheet. The firm believes that Hanwha SolarOne has one of the strongest balance sheets in the industry as it only has $381 million in debt and $257 million in cash and cash equivalents.
Shipments are forecasted to grow over 20 percent in the second half of 2011 while pricing is likely going to continue to fall. Pricing is expected to fall in the high double-digits in the third quarter and is not predicted to rise again until the second quarter of 2012.
An analyst at Wells Fargo comments, "With a strong financial backer, what we view as a healthy balance sheet, and a growing brand, we believe HSOL will emerge as a stronger competitor once the industry exits the downturn. Still, near-term earnings power looks weak and we prefer component manufacturers with higher margin structures."
The firm likes Yingli Green Energy (NYSE: YGE) and Trina Solar (NYSE: TSL) over HSOL currently.
Wells Fargo cut its 2011 and 2012 EPS estimates from $0.68 and $0.92 to $0.01 and $0.43. Revenue for the two years is forecasted to be $1.186 billion and $1.207 billion.
For more ratings news on Hanwha SolarOne click here and for the rating history of Hanwha SolarOne click here.
Shares of Hanwha SolarOne closed at $3.86 yesterday.
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