North Coast Solar Stocks

May 20, 2009

Solarfun upgraded to ‘Hold’

Filed under: SOLF — Tags: , , , , , — Jason @ 8:25 am

Solarfun upgraded to ‘Hold’ by Jefferies on 1Q surprise, positive outlook

Wednesday May 20, 2009, 8:25 am EDT

NEW YORK (AP) — Chinese solar cell maker Solarfun Power Holdings Co.’s (SOLF) better-than-expected first-quarter earnings, optimistic full-year outlook and easing liquidity pressures prompted an analyst to upgrade the stock on Wednesday.

Jefferies & Co. analyst Paul Clegg said the company’s cash position and lack of large capital projects for the rest of the year strengthen the company’s liquidity position and should ease concerns. He upgraded the stock to “Hold” from “Underperform” and doubled his price target to $6.

On Tuesday, Solarfun posted a quarterly net loss of 2 cents per share, which beat Wall Street expectations of a 17-cent-per-share loss. The company did not provide specific full-year profit estimates, but said it expects a “meaningful rebound” in the second half of the year as demand picks back up.

Clegg noted that the company’s operating outlook is improving, but questions remain about the impact of Chief Executive Harold Hoskens’ recently announced departure from the company. This, along with the CFO’s departure in March “create some uncertainty with the investment community,” Clegg said, adding, “Solarfun could have a potential upside if solid new managers are appointed.”

The analyst also raised his full-year profit estimate to 19 cents per share to reflect better polysilicon and wafering costs, offset partially by a slip in average selling price. This compares with his previous estimate for a profit of 15 cents per share.

Analysts polled by Thomson Reuters forecast a full-year loss of 12 cents per share, on average.

Shares of Solarfun rose 2 cents to $6.47 in premarket trading.

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