Bachman Upgrades Solarfun (Nasdaq:SOLF) and Raising Price Target

Nov 22, 2010
Author: SCP Editor

November 22, 2010 – Analyst Comments – Auriga’s Mark Bachman upgraded Solarfun (Nasdaq:SOLF) to BUY, raising his price target to $14 from $11.50 noting that the stock is trading about 30% below estimated Q411 book value of $11.51 and about 60% below $14 stock price.

 Key Takeaways:

·         Sees more long-term upside than downside potential “for more adventurous investors willing to accumulate the stock at these lower levels”

·         Conservative model shows Solarfun can operate in lower-price, lower-volume environment and still generate profit

·         Doesn’t see company losing money in any quarter in 2011

·         Planned scale of 2011 capacity expansion and sales at below market prices should lead to share gains at expense of Western manufacturers

·         $14 price target is 8x FY11 EPS estimate of $1.75 and 1.2x expected Q411 book value of $11.51 – reminding investors that this is 12-month target and near term stock price volatility should be expected