BofA Lowers PT On MEMC to $6.50 From $8

In a note out today, Bank of America reiterated a neutral rating on solar products maker MEMC Electronic Materials

, but lowered its price target on the stock to $6.50 from $8. That price target is still well above where the shares currently trade. The bank also lowered its CY12 revenue/non-GAAP EPS estimates to $3.11B/$0.73 from $3.28B/$0.67 on MEMC. “Due to the uncertainty in both pricing and demand for solar wafers, as well as MEMC's foray in financing solar customers, investors have been challenged to determine an earnings model for the company in the foreseeable future. The uncertainty in forecasting the SunEdison business remains. Our $6.50 PO is based on a sum of the parts analysis and P/E multiples for the semi and solar businesses. The blended average of semi and solar peers yields 10x P/E multiple on 2012E earnings. We apply a discount to the average multiple to account for execution risks and SunEdison volatility and use an 9x multiple on CY12E earnings to arrive at a $6.50 price objective,” Bof A said in the note.