UPDATE: Goldman Sachs Reiterates Neutral Rating, Raises PT on Advanced Energy Industries Following REFUsol Acquisition

In a report published Wednesday, Goldman Sachs analyst James Covello reiterated a Neutral rating on Advanced Energy Industries

, and raised the price target from $14.50 to $16.00. In the report, Covello noted, “Advanced Energy acquired REFUsol, a privately held string-inverter provider based in Germany. AE paid €59 mn, which includes €9 mn of assumed debt, and there is an additional €10 mn potential earn out. AE believes the deal will be accretive within 12 months, and it expects both revenue and cost synergies. With respect to revenue, AE believes REFUsol could help drive total solar energy sales to $400-$430 mn by 2014, which we estimate implies an additional $80-$115 mn vs. its prior targets. This includes the ability for AE to sell REFUsol products in North America, and the ability for AE to use REFUsol's distribution in Europe, India, and the Pacific Rim for its current portfolio. In terms of cost synergies, AE estimates it can reduce combined company costs by $8-10 mn. We lower 2013 EPS to $0.95 from $1.00 on higher costs, and raise 2014/2015 EPS to $1.65/$1.70 from $1.55/$1.60 on higher revenue but lower gross margins.” Advanced Energy Industries closed on Tuesday at $17.95.