LDK Downgraded, Stock Spikes

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Morgan Stanley analyst Sunil Gupta slapped an equal weight rating on LDK solar today, down from overweight, and put his price target at $5.10 down from $14. It was part of a larger negative report on the solar industry.

How did the market react to the news? By boosting LDK (LDK) Solar’s share price 5%, which is equal to a quarter. The rest of the solar market fell, with First Solar (FSLR), Evergreen Solar (ESLR), SunPower (SPWRA) all sinking.

Gupta’s report hit on some of the same points most people have made all year long. Demand will drop, and along with it, prices.There will be oversupply this year and losses across the board. In 2010, there will be break even conditions.

Cleantech puts some of the highlights in a nice bullet form:

  • Downgraded shares of Motech (6244.TWO) from equal weight to underweight and dropped the price target from NT$49 to NT$56 (US$1.45 to $1.66).
  • cut price targets on Korea-based KCC (KSE) from 240,000 won to to 237,000 won ($173.50 to $171.35).
  • dropped the price target on solar wafer maker ReneSola (SOL) from $5.20 to $2.30.
  • dropped the price target for Suntech Power Holdings (STP) from $11 to $7.
  • cut the target for Trina Solar (TSL) from $9.10 to to $7.30.

 

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