NEW YORK (
Yingli Green Energy
is getting a boost early on Thursday from Oppenheimer & Co. The securities firm relaunched its solar sector coverage and its strongest favorable call was a buy on Yingli Green Energy shares.
Yingli shares were up 3% in early trading on Friday morning.
Yingli has seen its share price erode by one-third in 2010, as concerns about the construction of its polysilicon plant have continued to temper Street expectations for earnings power. Yingli shares have fallen from over $18 to a range between $12 and $13 in April.
Analyst Adam Krop of Ardour Capital was the first to downgrade Yingli on concerns about the polysilicon plant earlier in 2010, but after a big slide in Yingli's share price, Krop places a buy back on Yingli and a price target of $15.
The Street view of Yingli Green Energy has been improving since its big share slide, as the company heads into first quarter earnings season. Auriga Securities also came
out with a buy on Yingli Green Energy shares this month and a price target of $18.
Oppenheimer & Co. said in its initiation of coverage of Yingli shares, with a price target of $17, that the low-cost Chinese solar company is still positioned to be one of the biggest beneficiaries from the pressure on average sales price, which OpCo thinks will reach 15% to 20% in the second half of 2010 based on the German feed-in tariff situation.
Oppenheimer analysts did not try to hide the potential risks with the build out of Yingli's poly plant. However, Oppenheimer thinks that Yingli shares still have 30% upside to the current Street view for the first half of 2010. Yingli shares plummeted after its fourth quarter earnings report, and the shares have not rebounded, even during the recent big solar rally.
The near-term catalysts for Yingli, in the opinion of Oppenheimer, are blended poly prices coming down by $10 to $15 by the fourth quarter, flat module average sale pricing in the first half of the year, and upside to shipments in the second quarter.
In the final analyst, Yingli's ability to combine high gross margins -- OpCo's is estimating 30% gross margins for the first half of 2010 -- with its aggressive stance on average sale price, makes Yingli a best positioned solar company, even if the market has not treated Yingli shares that way in the first months of 2010.
Oppenheimer is modeling earnings per share of $1.25 in 2010, and $1.05 in 2011 for Yingle, versus a Street consensus of 89 cents for 2010 and $1.11 for 2011.
also received an upgrade from OpCo, from underperform to market perform, and Suntech shares received a similar boost early on Friday morning.
Yingli and Suntech had the biggest early Friday returns in the solar sector.
, which has quickly become a solar dog after reporting this week that its first quarter gross margins will disappoint based on a foreign exchange loss, received another downgrade from OpCo, from outperform to market perform.
Canadian Solar shares were down marginally on Friday morning in early trading, the third straight day of a decline in CSIQ's share price.
-- Reported by Eric Rosenbaum in New York.
>>Yingli Recovers on Poly Plant Report
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