FCEL Reports Weak Results On Difficult Financing Environment

Today, analysts at Janney Capital Markets reiterate this “Buy” rating on FuelCell Energy, Inc. (NASDAQ: FCEL)(FREE stock trend analysis). The price target has been reduced to $6 from $8 resulting from a drop in ASPs and uncertainty relating to project financing.

The firm says “FuelCell Energy (FCEL)(FREE stock trend analysis) announced disappointing fiscal fourth quarter (October) results, largely attributable to the lack of funding required for several key projects in Connecticut to get under way. We believe, however, that the Connecticut projects will begin in the first quarter of 2010. We are still bullish on the long-term potential for FCEL in key markets such as South Korea and California, and are keen to hear the Company's plans regarding partnerships to attack European markets. We are lowering our fair value on lower CY2010 revenue resulting from a drop in ASPs and uncertainty relating to project financing. Our new fair value of $6 (from $8) represents an enterprise value of 2.5x our 2010 revenue estimate of $168 million.”

“For 2010, our revenue and EPS estimates go to $168 million and -$0.71 from $181 million and -$0.68. For 2011, we are modeling EPS of $0.28 on revenue of $290 million and improving margins (previously $0.03 on revenue of $305 million).”

Thursday, FCEL closed at $3.08.