UPDATE: Canaccord Genuity Starts Advanced Energy Industries (AEIS) at Hold

Canaccord Genuity initiated coverage on Advanced Energy Industries (NASDAQ: AEIS) with a Hold rating and a price target of $20.00.

"We believe that we are in favorable points in both the semi and solar cycles. We believe that AE’s semi business will fully participate in the upcycle given its strong share and competitive positioning," said analyst Josh Baribeau. "AE’s power conversion business is nicely profitable and we believe that it will continue to outpace competitors in new design activity. The same cannot be said for the solar business where competitive pressures on pricing may offset the benefits of semi."

"Despite the fact that the company has some of the best-performing inverters in the commercial and utility markets, we believe that AE could struggle to return this business to profitability given incumbents fighting for market share and the threat of lower-cost Chinese competitors. While strong cash flow, a compelling target model and a commitment to growing EPS are generally sufficient for us to be constructive on a stock, we choose to stay on the sidelines until the CEO transition is complete and/or the solar business becomes a driver of earnings," he added.

For an analyst ratings summary and ratings history on Advanced Energy Industries click here. For more ratings news on Advanced Energy Industries click here.

Shares of Advanced Energy Industries closed at $19.90 yesterday.

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