Dougherty & Co Downgrades Power-One (PWER) to Neutral; Gross Margin Pressure is Here to Stay
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Price: $45.05 +0.54%
Rating Summary:
5 Buy, 7 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
5 Buy, 7 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Dougherty & Co downgraded Power-One (NASDAQ: PWER) from Buy to Neutral, price target cut by $1 to $5.00.
Dougherty analyst says, "The 3Q earnings shortfall is primarily a result of lower than anticipated gross margin, which came in at 28.1%, vs. our 32.0% estimate and Q2’s 33.6% result. The sharp decline in sequential gross margin was attributed to PWER’s decision to match competitor’s inverter pricing in certain markets near the end of the quarter. PWER classified the pricing pressure as “short-term” in nature as a competitor was clearing excess inventory...We believe PWER is striving to improve gross margin by increasing capacity utilization, reducing new plant start-up costs, and introducing lower cost products. We see potential for short-term margin increases, but believe the overall environment will remain challenging as new and existing competitors look to grow market."
For more ratings news on Power-One click here and for the rating history of Power-One click here.
Shares of Power-One closed at $4.93 yesterday.
Dougherty analyst says, "The 3Q earnings shortfall is primarily a result of lower than anticipated gross margin, which came in at 28.1%, vs. our 32.0% estimate and Q2’s 33.6% result. The sharp decline in sequential gross margin was attributed to PWER’s decision to match competitor’s inverter pricing in certain markets near the end of the quarter. PWER classified the pricing pressure as “short-term” in nature as a competitor was clearing excess inventory...We believe PWER is striving to improve gross margin by increasing capacity utilization, reducing new plant start-up costs, and introducing lower cost products. We see potential for short-term margin increases, but believe the overall environment will remain challenging as new and existing competitors look to grow market."
For more ratings news on Power-One click here and for the rating history of Power-One click here.
Shares of Power-One closed at $4.93 yesterday.
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