Wednesday, February 15, 2012

LDK (LDK) (FSLR) (WFR) (SPWR) (STP) (JASO) (YGE) (TSL) Under Pressure

Solar companies LDK (NYSE:LDK), First Solar (NASDAQ:FSLR), MEMC Electronic Materials (NYSE:WFR), SunPower (NASDAQ:SPWR), Suntech (NYSE:STP), JA Solar (NASDAQ:JASO), Yingli (NYSE:YGE) and Trina Solar(NYSE:TSL) were under pressure today on news Germany’s feed-in-tariff will probably be cut even more than expected, which would hit the industry even harder than it has been from prior cuts there.

Germany, along with Italy, is among the largest consumers of solar power in the world.

According to Citigroup (NYSE:C) analyst Timothy Arcuri, cuts in subsidies for April could be much worse than the consensus 10 percent to 20 percent cuts being looked for by the street. He sees cuts beginning at 20 percent and being as high as 35 percent for April, 2012.

Arcuri sees all solar companies being hit hard if his projections are accurate. Even if they aren't as high as he sees, it is expected they will be higher than originally estimated, and will put downward pressure on the industry even more than it has been.

Vishal Shah, an analyst for Deutsche Bank (NYSE:DB) sees an April subsidy cut from Germany of 15 percent, with a additional monthly cuts of 2 percent afterwards. Shah said there will also likely be a subsidy cap on solar as the EU economy remains weakened.

JinkoSolar was downgraded by Auriga from a "Hold" rating to a "Sell" rating Tuesday, while Trina and Yingli were both downgraded by Auriga from "Hold" to "Sell" as well.

We should see a number of downgrades in the solar sector as the data is analysed.

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