DETROIT – Shares of Energy Conversion Devices Inc. on Tuesday lifted after the solar energy product manufacturer was upgraded on its exposure to strong markets in France and Italy, pending U.S. legislation helping solar energy companies and milder-than-expected price declines.
Energy Conversion Devices shares gained $1.07, or 3.8 percent, to $29.21.
PiperJaffray analyst Jesse Pinchel upgraded the company to “Buy” from “Neutral.” Pinchel warned investors of near-term volatility as other solar companies will likely report poor results in the coming weeks, but said the stock should appreciate over the next 12 months.
Pinchel said Energy Conversion Devices’ disproportionate exposure to the “fastest growing markets” of France and Italy will allow the company to outperform competitors exposed to Germany and the U.S. in the near term as Germany is at a seasonal slow point and the U.S. market has been crippled by the credit crisis and a barrage of negative earnings reports. He expects the market in Germany and the U.S. to pick up around March or April and May or June, respectively.
Pinchel added that the company’s exposure to markets in France and Italy make it less prone to commodity pricing. He said the company’s decline in average selling prices are less pronounced than expected.
“We see Energy Conversion Devices as the primary beneficiary of U.S. legislation,” he said, adding that the company’s exposure to the U.S. market is 18 percent of revenue and may represent potential upside.
Pinchel estimates a 2009 profit of $2.33 per share and 2010 profit of $2.95 per share. His price target for the company is $33.
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