Analyst Notes: Cowen’s Rob Stone Weighs in on SunPower (Nasdaq:SPWRA) and Evergreen (Nasdaq:ESLR)
Source: http://feeds.feedburner.com/~r/smallcappulse/feed/~3/423728691/Posted on Friday, October 17th, 2008 | In Small & Micro Cap
October 17 – ANALYST NOTES: Cowen & Company’s Rob Stone put an update note out on SunPower (Nasdaq:SPWR) and Evergreen Solar (Nasdaq:ESLR). SunPower’s stock jumped yesterday about 25% to $50 after releasing financial results and reassuring the Street it won’t need to raise additional capital under the existing business plan. There has been more concern about Evergreen, in the near term. Here are some of the highlights from Stone’s comments:
· Stone believes that SPWRA is one of the best positioned PV companies to deliver strong growth and cope with the current economic environment. He cited the company’s products, broad channel and geographic coverage as being key to its fundamental outlook.
· He said that Evergreen’s Q3 revenue came in short of expectations and the losses were considerably wider than he expected. The company has been able to ramp its revenue, but its margins remain, and are expected to remain in single digits (5% to 10%) “suggesting further ramp/yield issues.” In addition, the 30.9 million shares loaned to Lehman were added to the EPS calculation, further reducing EPS.
So Evergreen is clearly going to struggle in the near term, in Stone’s opinion, despite the fact that it announced this morning that it has a $1 billion backlog. Its technology is compelling, but they have to overcome issues surrounding ramping production at the Devens plant which are negatively impacting margins. Stone also issued an industry outlook on the solar sector, saying that he thinks PV shares have more than discounted the impact of economic and supply/demand challenges next year. The best positioned companies, he said, in the Cowen universe are Outperform (1)-rated Energy Conversion Devices (Nasdaq:ENER), First Solar (Nasdaq:FSLR) and SunPower (Nasdaq:SPWRA).
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