MEMC Electronic Materials (WFR) Solar Wafer ASP To Decline Sequentially In 1Q/2Q
Analysts at FBR Capital Markets reiterate their “outperform” rating on MEMC Electronic Materials Inc (NYSE: WFR), while reducing their estimates for the company. The target price for WFR is set to $22.
According to FBR Capital Markets, “Recent checks suggest (industrywide) semi wafer prices have continued to strengthen, up 5% QOQ (on a blended basis) in 1Q and expected up 10% QOQ in 2Q, though we believe the ASP increase is less for WFR as the company has continued to price lower (versus the industry average) to gain market share. Despite a slight increase in solar wafer ASPs in the month of March, we still expect QOQ ASP declines in 1Q/2Q. We believe the ASP decline is more than offset by higher-than-expected unit shipment.”
“Given the above trends in WFR's semi and solar business units, as well as WFR guidance from analyst day (from early February), we are updating our CY10/CY11 estimates… Although we are above the midpoint of the revenue guidance range (FBR estimate of $1,812M versus $1,750M–$1,850M), our operating margin estimate of 15.8% is slightly lower than the guidance range of 16%–17% primarily because of the downside risks associated with the integration of SunEdison and project constructions,” the analysts add.
FBR Capital Markets has reduced its EPS estimate for 2010 from $1.00 to $0.78.
