Dougherty & Co Issues $2 Price Target on A123 Systems (AONE); Competitive Space; Uncertainty Over Company’s Capitalization
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Price: $8.56 --0%
Rating Summary:
3 Buy, 5 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
3 Buy, 5 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Today, Dougherty & Co initiated coverage on A123 Systems (Nasdaq: AONE) with a Neutral rating and $2 price target. (however, shares are currently at $2.43).
Regarding the price target, Dougherty analyst, Andrea James, said, "Our $2.00 price target is based on a DCF that assumes that General Motors (NYSE: GM) begins ordering at least 40,000 battery packs per year by 2015 and that Fisker Automotive is able to scale orders to above 15,000 per year by 2013. It also assumes dilution from a capital raise in late FY12, or alternatively, factors in uncertainty over AONE receiving a Dept. of Energy loan. We see possible upside to our price target if AONE were to win unexpected new business or realize expansion to a new production programs from an existing development partnership."
"A123 operates in a competitive space with several other firms vying for leadership in the electric battery market. Competitors include LG Chem, Johnson Controls (NYSE: JCI), the NEC/AESC JV, Panasonic/Sanyo, SB LiMotive (the Samsung-Bosch JV), GS Yuasa and Hitachi. A123 has announced several wins that show it is a serious competitor, including wins with GM, Fisker, BMW, Daimler (NYSE: DAI), Via Motors and Smith Electric."
However, James expresses concerns near-term, saying the company is plaqued with uncertainty over capitalization and the company could run out of money by the second quarter of 2013 (unless Dept of Energy loans money or the company raises capital on The Street)
Regarding the price target, Dougherty analyst, Andrea James, said, "Our $2.00 price target is based on a DCF that assumes that General Motors (NYSE: GM) begins ordering at least 40,000 battery packs per year by 2015 and that Fisker Automotive is able to scale orders to above 15,000 per year by 2013. It also assumes dilution from a capital raise in late FY12, or alternatively, factors in uncertainty over AONE receiving a Dept. of Energy loan. We see possible upside to our price target if AONE were to win unexpected new business or realize expansion to a new production programs from an existing development partnership."
"A123 operates in a competitive space with several other firms vying for leadership in the electric battery market. Competitors include LG Chem, Johnson Controls (NYSE: JCI), the NEC/AESC JV, Panasonic/Sanyo, SB LiMotive (the Samsung-Bosch JV), GS Yuasa and Hitachi. A123 has announced several wins that show it is a serious competitor, including wins with GM, Fisker, BMW, Daimler (NYSE: DAI), Via Motors and Smith Electric."
However, James expresses concerns near-term, saying the company is plaqued with uncertainty over capitalization and the company could run out of money by the second quarter of 2013 (unless Dept of Energy loans money or the company raises capital on The Street)
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