Auriga Reiterates a 'Sell' on LDK Solar (LDK); Crises Are Not Going Away Anytime Soon
Tweet
Share
E-mailGet Alerts LDK Hot Sheet
Price: $1.01 --0%
Rating Summary:
2 Buy, 2 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
2 Buy, 2 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
Auriga reiterates a 'Sell' on LDK Solar (NYSE: LDK) price target of $3.00.
Analyst, Hari Chandra, said, L"DK Solar's operational crisis (losses well beyond 2013), working capital crisis (~130 day cash conversion cycle), balance sheet crisis (~78% debt/capital) do not have any short-term fixes, and its survival is in large part due to help from China's state banks. Maintain Sell, $3PT. Can China's employment welfare scheme (aka LDK Solar) handle the truth? Mass layoffs? NOT so fast... Media reports recently noted LDK Solar may announce mass layoffs shrinking its labor pool to 2008 year-end level of 14,130 vs. 27,801 (as of 3Q11) - we believe it would be an extreme move, and predictably LDK Solar denied it. Our analysis indicates a workforce of ~19,500 for LDK Solar to be in-line with its peer group, or entailing a ~30% shrinkage. We believe the government may overrule such a move, and LDK Solar may settle for a 'face' saving 5%-10% cut...But China needs examples to send a message: China's manufacturing activity is now down for fifth month in row, and its debt induced growth is clearly showing signs of being on an unsustainable paradigm."
For an analyst ratings summary and ratings history on LDK Solar click here. For more ratings news on LDK Solar click here.
Shares of LDK Solar closed at $3.23 yesterday.
Analyst, Hari Chandra, said, L"DK Solar's operational crisis (losses well beyond 2013), working capital crisis (~130 day cash conversion cycle), balance sheet crisis (~78% debt/capital) do not have any short-term fixes, and its survival is in large part due to help from China's state banks. Maintain Sell, $3PT. Can China's employment welfare scheme (aka LDK Solar) handle the truth? Mass layoffs? NOT so fast... Media reports recently noted LDK Solar may announce mass layoffs shrinking its labor pool to 2008 year-end level of 14,130 vs. 27,801 (as of 3Q11) - we believe it would be an extreme move, and predictably LDK Solar denied it. Our analysis indicates a workforce of ~19,500 for LDK Solar to be in-line with its peer group, or entailing a ~30% shrinkage. We believe the government may overrule such a move, and LDK Solar may settle for a 'face' saving 5%-10% cut...But China needs examples to send a message: China's manufacturing activity is now down for fifth month in row, and its debt induced growth is clearly showing signs of being on an unsustainable paradigm."
For an analyst ratings summary and ratings history on LDK Solar click here. For more ratings news on LDK Solar click here.
Shares of LDK Solar closed at $3.23 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Fiserv (FISV) PT Lowered to $60 at Freedom Broker
- UBS Reiterates Buy Rating on NVIDIA (NVDA), Expects Q2 Revenue Beat
- Freedom Broker Upgrades Lifeway Foods (LWAY) to Buy
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
AurigaSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
