MT Insider: Goldman Sachs Bullish on Solar, Upgrades FSLR and SPWR, Raises Price Target


In a note out today, Goldman Sachs ( GS ) said it is bullish on the solar sector based on better visibility for earnings and growth in the near term.

GS outlines its framework for re-rating the sector: namely, based on MW (MegaWatt) growth, new projects/financing, valuation, and earnings power. Specifically, the analyst is increasing his 12-month price targets across his entire solar coverage by an average of approximately 40%.

MEMC Electronic Materials ( WFR ) is Goldman's top idea based on sum of the parts analysis and upside to EPS estimates. The analyst has a Buy recommendation on the stock and a $10 price target.

GS is upgrading First Solar ( FSLR ) to Buy (previously Neutral) based on its high quality backlog (thus, earnings visibility) and reasonable valuation given the negative sentiment on the stock. The analyst has a $64 price target on FSLR.

Additionally, SunPower Corp ( SPWR ) is upgraded to Neutral (previously Sell) on the premise that solar leasing momentum is fairly valued. The analyst's target price is $18.

GS acknowledges that longer term risks remain based on an uncertain pipeline growth and emerging market economics.

WFR 8.04 +0.42 +5.51

FSLR 55.80 +4.04 +7.89

SPWR 20.32 +0.68 +3.46

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: FSLR , GS , SPWR , WFR

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