Goldman Sachs Attends Advanced Energy Industries' Analyst Day

In a report published by Goldman Sachs, it attended Advanced Energy Industries’ AEIS analyst day.

Goldman Sachs said that the key takeaways were, “(1) The company believes its valuation does not reflect its record 4Q earnings and refocused portfolio, and noted that a break up is a possibility longer term. (2) AE believes it can achieve a 20% EBIT margin at $700-$750 mn in revenues in about five years. However, management’s focus is on growing EPS rather than targeting a specific margin. (3) AE believes it can run the business with $80 mn in cash but plans to keep its extra cash for strategic opportunities.

(4) AE’s largest growth opportunity is utility and commercial inverters, with management noting that the project pipeline is strong. AE estimates the worldwide inverter market can grow from about 20 GW in 2010 to 35 GW in 2014. AE believes it can outgrow this as it is beginning to penetrate Europe and Asia, and it is more exposed to the faster growing utility market. (5) AE estimates that its inverters can deliver $90-$250K of NPV per MW to customers over 20 years vs. peers through lower cost and better performance. (6) Service for inverters is a focus, with offerings for both AE and competitor systems. (7) Key thin film drivers include LEDs, 3D packages, gen 8/10 glass, OLED displays, and crystalline/CIGS solar.”

Advanced Energy Industries closed yesterday at $16.21.