UPDATE: Raymond James Upgrades TPI Composites (TPIC) to Strong Buy

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(Updated - August 20, 2019 7:09 AM EDT)

(updated to add analyst comment)

Raymond James analyst Pavel Molchanov upgraded TPI Composites (NASDAQ: TPIC) from Outperform to Strong Buy with a price target of $32.00.

The analyst comments "We are upgrading TPIC from Outperform to Strong Buy, the first time we have done so since its IPO in 2016. Despite the different industry, this rating change is conceptually similar to our upgrade of Chart Industries on August 13. At a time when the clean tech index (ECO) is up 38% YTD, both stocks experienced outsized dislocation in recent weeks - and, in fact, TPIC is down 29% YTD. In the case of TPI, the culprit was the August 7 cut in EBITDA guidance for 2020 - the latest illustration of margin choppiness due to production line transitions. In our opinion, while such choppiness is inherent in the business model, the stock's re-rating to its lowest-ever EBITDA multiple indicates that the margin risk is fully priced in. Meanwhile, opportunities in the heavy-duty EV market remain underappreciated and provide essentially free optionality vis-à-vis future catalysts."

For an analyst ratings summary and ratings history on TPI Composites click here. For more ratings news on TPI Composites click here.

Shares of TPI Composites closed at $17.50 yesterday.

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