Yesterday, solar cell and module manufacturer Suntech Power (STP) had an impressive Q2, beating both EPS and revenue consensus, as well as raising both Q3 and full-year revenue guidance.*
Shares of STP have since surged 17%. So you can bet Wall St. is raising its targets.
FBR maintains MARKET PERFORM, target raised from $39 to $42:
- “…this should not be surprising since most solar PV companies that have reported 2Q results have also ‘beaten and raised’ CY08 expectations.”
- “..the biggest difference is in projected supply growth, with STP expecting (industry) supply to grow at the same rate as demand growth (or 25% to 30%) while STP is increasing its own capacity by 40% in CY09 and while we are modelling for supply to grow 50%-plus in CY09. YES, BIG DELTA!”
Credit Suisse maintains NEUTRAL, target raised from $48 to $50.
AmTech reiterates BUY:
- “This is a very strong revenue and EPS result on strong shipments, ASPs, and GM.”
- “STP is fully booked for 2H08, and now have 200MW signed for 2009 at fixed pricing and expects by end of Q3 will have 500MW additional signed at fixed pricing – this is the most bullish commentary in the release in our view. This would equate to 70%+ of our ’09 production estimate.”
Jeffries reiterates BUY, target raised from $67 to $70.
About 40% of STP’s sales came from Spain in Q2. which will be severely cutting solar subsidies in the coming months. Based on the company’s commentary, it looks like Italy, Germany and other markets may actually be the saviors for the solar industry.
*STP reported Q208 EPS of $0.41 vs. $0.32 consensus and revenue of $480.2 million vs. $443.53 million consensus. They guided Q308 revenue to $570 million – $580 million ($542.6 million consensus) and raised FY08 revenue guidance from $1.9 billion – $2.1 billion to $2.05 billion – $2.15 billion ($2.0 billion consensus). FY08 shipment target was raised from 530MW to ~550MW.
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