Wunderlich Securities Reiterates Buy Rating on American Superconductor (AMSC)
Wunderlich Securities is out with a research report this afternoon, where it reiterates its Buy rating on American Superconductor Corp. (NASDAQ: AMSC); it has a $50.00 price target on the stock.
The WS analysts said that they believe AMSC represents “one of the best opportunities in a U.S.-based alternative energy company.” They said that the company is experiencing nearly two times the growth as compared to the industry average. In the year ended March 2010, revenues increased by 73%.
The Wunderlich analysts noted, “AMSC is developing its own electric generator - and it's a big one. A 10MW wind turbine would significantly change the face of the AMSC business. AMSC's Windtec division is a well-known provider of wind turbine designs and AMSC is a well-known provider of turbine electronics.”
If American Superconductor is successful in making a commercial 10MW direct drive superconducting generator, the Wunderlich analysts believe that this would more than double its current wind turbine opportunities, which they estimate is in excess of $1 billion.
In regard to valuation, WS analysts said, “Our target is based on a four-stage discounted cash flow. Comparisons with established wind turbine companies show AMSC with superior growth. Vestas revenue has grown 50% in the last two years while AMSC has grown 200%. At $50, it would represent a PEG of about 0.7 on CY11 non-GAAP EPS of $1.95.”
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