MEMC Electronic Materials (WFR) posted a disastrous Q2 after the close, sending the stock crashing almost 20%. Wall Street is now really excited about it, however.
The silicon wafer manufacturer and solar silicon supplier posted a Q2 EPS miss of $0.92 (vs. $1.00 consensus) and a Q2 revenue miss of $531.4 million (vs. $557.9 million consensus). Crappy guidance also helped pile it on.
This line in the earnings report is never a good sign:
We encountered unanticipated events towards the tail end of the quarter.
But all that means today is that on Wall St., all the bulls now have a cheaper stock to buy.
FBR maintains OUTPERFORM, target cut from $100 to $80:
In a nutshell, what has kept our Outperform rating unchanged is the fact that the company is exiting the month of July at a quarterly revenue run-rate of more than $650M, which compares to our new 3Q revenue estimate of $580M, implying that, if there is no more manufacturing hiccups, our
2H08 estimates could prove overly conservative.
We do admit that we have been on the wrong side of the stock; and, even despite our channel checks throughout the month of June, the manufacturing bottlenecks turned out right after our checks. However, given the ultra-conservative guidance, as well as our estimates that are also below the company's midpoint of its guidance range, combined with the sell-off in the stock, we believe the risk/reward profile does not warrant a change of opinion.
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Deutsche maintains BUY, target cut from $82 to $68:
- remain bullish on valuation
JP Morgan upgrades from Neutral to OVERWEIGHT:
- stock is too cheap now
Citi upgrades from Hold to BUY, target raised from $64 to $65:
- bad news priced in
Soleil reiterates BUY, target of $103:
- shares are "extremely undervalued" and investors are overreacting to the last couple bad quarters as results will improve in 2009
See Also:
MEMC Electronic Materials (WFR): Target Slashed, Long Into Earnings (WFR)
MEMC Electronic Materials (WFR): Production Problems Minimal (WFR)
MEMC Electronic Materials (WFR) Gets Boost From Stong Polysilicon Prices (WFR)