Solar: Suntech, LDK Upgraded By Lazard Capital
Lazard Capital solar analyst Sanjay Shrestha today raised his ratings on both Suntech (STP) and LDK Solar (LDK). He ups Suntech to Buy from Hold; for LDK he goes to Hold from Sell.
Shrestha writes today that ASPs in the solar sector “are beginning to stabilize.” He notes that limited access to capital throughout the solar value chain has caused widespread cancellations or decreases in capacity expansion plans. For instance, he says that polysilicon capacity expansion plans have been reduced by 8,700 metric tons in 2008, 22,000 metrics tons in 2009 and 16,000 metric tons for 2010; Shrestha says there have likewise been reductions in capacity expansion plans in wafer, cell and module production.
The Lazard analyst notes that the solar sector’s Q4 earnings season kicks off next week with a report from MEMC Electronics Materials (WFR) on Jan. 22. He cautions that pressured ASPs will cause significant gross margin deterioration for most players, and he cautions that first half and 2009 guidance “will likely be bleak,” given economic concerns and tight lending standards.
