Surprisingly, Credit Suisse is out upgrading Renesola (SOL) fromNeutral to Outperform despite a tough quarter for the company. PiperJaffray is downgrading SOL from Neutral to Underweight and lowering theprice target from $6 to $4.50.
Hat tip to StreetInsider for the following analyst comment from Piper:
“We believe Renesola is making the right moves by verticallyintegrating downstream to cells/modules. Failure to integratedownstream, in our opinion, would result in anemic margin and eventualshare loss to integrated poly incumbents, customers that are nowprocessing wafers internally, and smaller ingot/wafer competitors thatare quickly adding leading edge wafer capacity thanks to low barriersto entry and equipment suppliers eager to develop new customers. Webelieve entry barriers to ingots and wafers are lower than cellprocessing and naturally polysilicon production. Further, we believeSOL’s polysilicon plant may be a drag on the company’s earnings,balance sheet, and ROIC as it ramps over many quarters. While webelieve company management can navigate a difficult course ahead, webelieve its potential share appreciation will trail that of verticallyintegrated and cell-only companies in China and thus downgrade sharesof SOL to Underweight.”