Merrill Lynch reduced American Superconductor (AMSC
) to long-term neutral from strong buy, and keeps the near-term neutral rating.
Analyst Christine Farkas says the third quarter was worse than she expected. Given the near-term uncertainty in product sales and current cash burn levels, she believes the company has turned into much more of a "show me" stock. She expects shares to see near-term pressure given the disappointing quarter and lower cash per share levels. While positive developments related to high temperature superconducting wires and products could have a favorable impact on the stock, in this environment Farkas thinks the upside could be limited.