Evergreen Solar Up: 2 Firms Issue Bullish Notes
By ERICA OWEN
October 12, 2005 3:57 p.m.
NEW YORK -- Evergreen Solar Inc. (ESLR) shares rose 10% Wednesday after the maker of solar-power products completed a new German plant and received positive comments from separate Wall Street analysts.
Jefferies & Co. initiated coverage of the Marlboro, Mass., company at buy with a $14 price target; meanwhile, First Albany raised its price target to $15 from $7.25, calling Evergreen Solar "one of the best-positioned" companies in the solar market.
"We believe ESLR remains ideally positioned within the industry and view any potential undue weakness from quarterly results as a long-term buying opportunity," said First Albany analyst Sanjay Shrestha, who doesn't own Evergreen shares.
Jefferies analyst Jeffrey W. Bencik said: "We are buyers of ESLR based on positive secular trends in the industry and ESLR's long-term earnings prospects. The industry remains in the early stages of growth, and macro events such as increasing energy prices are likely to be drivers of a higher share price prior to earnings materializing."
Evergreen Solar shares gained 9.7%, or 77 cents, to $8.64 on volume of 3.9 million, more than twice its average volume of 1.6 million.
In addition, Evergreen Solar announced the "roof-closing" of its new manufacturing construction in Germany.
Ardour Capital Investments analyst Walter V. Nasdeo said the confluence of the analyst's positive comments and the construction announcement together are driving the stock.
"I like the stock. I like the company. I like the story - I just think it's a little rich right now," Nasdeo said. "These prices are little aggressive for this company. They still have to get the capacity out the door."
The German facility's completion is fundamental to Evergreen Solar's prospects as it currently does not have the capacity to meet demand, Nasdeo noted. The new plant will have a 30 megawatt capacity, which is double Evergreen Solar's current 15 megawatt capacity. Plus, Bencik said Germany accounts for 39% of global sales
"Backlogs in the industry are currently running at six months to a year," said Bencik, who doesn't own Evergreen shares. "We expect demand to continue to exceed supply for at least the next five years, with any expansion plans for competitors hindered by a silicon shortage."
First Albany's Shresta said Germany's feed-in tariffs could push Evergreen Solar's long-term growth plans as Germany's market could grow well past 50% a year.
Analyst Brion Tanous, of Merriman Curhan Ford & Co., added that Texas and Louisiana governments are driving demand as well, and have been calling on a number of solar-power product producers as Hurricanes Rita and Katrina have sparked renewed government interest in building in environmentally sound ways. Tanous noted Evergreen Solar is a Merriman investment-banking client.
First Albany makes a market in securities of Evergreen Solar and co-managed a public offering of Evergreen Solar, who is also the firm's banking client.
Jeffries is also an Evergreen Solar market-maker and placement agent. |
