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Gold/Mining/Energy : Evergreen Energy Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (56)	1/28/2008 10:13:28 AM
From: Dennis Roth	Respond to of 1890

Evergreen Energy Inc. (EEE): Dropping coverage of Evergreen Energy (EEE) - Goldman Sachs - 01/28/08 We are dropping coverage of Evergreen Energy (EEE) to better focus our resources. Our coverage view on alternative energy is Neutral and our company rating on EEE is Neutral with a six-month price target of $2.25. Our FY07-FY09 estimates were -$0.95, -$0.60 and -$0.59. Target price methodology: Our target price methodology is a probability weighted scenario analysis of a path to profitability vs. a liquidation event. We also take into account DCF analysis as well. Risks: (1) Product does not work as expected. (2) Higher-than-expected operating costs lead to poor economics. (3) Lack of customer interest drives stagnant revenue growth. Our investment view is as follows: Evergreen is a "show-me" story; so far large-scale commercial contracts have not materialized. Specifically, (1) Evergreen is mainly a one-product company, so there are inherent risks. Evergreen's business is involved in trying to do something that others have been so far unable to do effectively and economically--using pressure and heat to convert low-BTU coal into high-BTU coal. As with any company that is predominantly focused on a single product or technology, there is risk associated with the stock if that product or technology does not work as anticipated. (2) Large-scale commercial sales are needed to validate the business. We continue to believe that Evergreen Energy is a "show-me" story given that we feel the ultimate validation of the technology and economics will be in the company proving to investors that its technology can convert low-grade coal into high-grade coal at attractive economics. The best way to do this would be to obtain large-scale contracts with customers.