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发帖数: 152 | 1 Stock Rating/Sector View: 1-Overweight/2-Neutral
Price Target: USD 23.00 (from USD 18.00)
Price (17-Feb-2011): USD 17.43
Potential Upside/Downside: +32%
Q4 results were above consensus, but more importantly, Q1/2011 outlook was
revised upwards (buy-side was expecting management to maintain 2011 outlook)
. Although the beat was driven by Italy, the raise was largely due to
improved demand outlook in North America, in our view. Despite the recent
positive share price performance, we continue to see further upside to
shares for the following reasons: (i) We expect financing/loan guarantee
announcement for the CVSR project relatively soon and also expect commercial
/residential demand in the US to pick-up in front of cash grants expiration
in 2H11, (ii) Management remains confident of achieving module cost
reduction targets by end '11 and also expects to achieve significant cost
savings from the new Oasis BoS platform. With continued progress on both
module and BoS cost reduction front, we expect the focus to shift from cost
disadvantage to relative cost advantage at the system level. Bottom line:
Longer term, SunPower remains well positioned in existing US market and
conference call comments suggest that Italian market exposure may not be
that large. Shares may be trading at a modest premium to Chinese peers, but
trade at a discount excluding the pipeline value. Maintain 1-OW rating,
raise price target from $18 to $23.
Positives: (i) Italian exposure a lot less than feared - 2011 revenues could
be less than 25% vs ~35% in 2010, (ii) Cost reduction progress not
completely baked into margin guidance whereas ASP premium reduction appears
to be baked into guidance, (iii) Solid 2011 visibility - fully allocated,
UPP Americas >95% booked, NA commercial >90% booked, (iv) Potential for
further upside to 2011 guidance exists. Concerns: (i) Longer term SunRay
pipeline quality likely deteriorating, (ii) Italian policy risk still
remains, (iii) Back-end loaded guidance may remain a near-term overhang, (iv
) Germany-related 2H11 pricing risk may not be incorporated into guidance. |
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