Jefferies Cuts Price Targets on Trina Solar (TSL), Strongly Positioned
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Price: $15.36 -9.27%
Rating Summary:
7 Buy, 14 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 2
Rating Summary:
7 Buy, 14 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 2
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Jefferies is maintaining its Hold rating on shares Trina Solar (NYSE: TSL) while lowering its price target from $10 to $8.
Management pre-announced its quarterly shipment results 25 percent lower than its previous guidance. The company also cut its 2011 shipment guidance to 1.4GW from 1.75-1.80GW.
In house margins of 18-19 percent fell inline with analyst expectations and kept shares from tanking on the lower shipment volumes. The firm notes these margin levels are impressive given the large decline in ASP and believes management was able to achieve these figures by purchasing cheaper poly and wafer supplies.
An analyst at Jefferies comments, "Our channel checks indicate that despite some year end demand pick-up from Germany, December visibility remains uncertain. TSL remains particularly exposed to project developers that are most aggressive on price. We view YGE as most exposed to rooftop installers that offer more monthly business regardless of price. We have heard aggressive prices from JKS which is run by a former TSL sales executive."
The firm is cutting its FY11 and FY12 EPS estimates from $0.95 and $1.43 to $0.42 and $0.05. Jefferies believes earnings will pick back up in 2013 as it forecasts EPS of $1.30 for the fiscal year.
For more ratings news on Trina Solar click here and for the rating history of Trina Solar click here.
Shares of Trina Solar closed at $7.85 yesterday.
Management pre-announced its quarterly shipment results 25 percent lower than its previous guidance. The company also cut its 2011 shipment guidance to 1.4GW from 1.75-1.80GW.
In house margins of 18-19 percent fell inline with analyst expectations and kept shares from tanking on the lower shipment volumes. The firm notes these margin levels are impressive given the large decline in ASP and believes management was able to achieve these figures by purchasing cheaper poly and wafer supplies.
An analyst at Jefferies comments, "Our channel checks indicate that despite some year end demand pick-up from Germany, December visibility remains uncertain. TSL remains particularly exposed to project developers that are most aggressive on price. We view YGE as most exposed to rooftop installers that offer more monthly business regardless of price. We have heard aggressive prices from JKS which is run by a former TSL sales executive."
The firm is cutting its FY11 and FY12 EPS estimates from $0.95 and $1.43 to $0.42 and $0.05. Jefferies believes earnings will pick back up in 2013 as it forecasts EPS of $1.30 for the fiscal year.
For more ratings news on Trina Solar click here and for the rating history of Trina Solar click here.
Shares of Trina Solar closed at $7.85 yesterday.
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