Markets & Finance

Citigroup Downgrades MEMC to Hold


Citigroup downgraded its investment recommendation on shares of silicon-wafer producer MEMC Electronic Materials (WFR) to hold, from buy.

Analyst Tim Arcuri says he believes investors may be disappointed by a lack of positive impact to gross margin stemming from the company's fully-back integrated operations (i.e. its ability to self-supply granular polysilicon, a key raw material). Arcuri says his channel checks suggest the culprit is pricing; 300mm wafer pricing was down 5% to 10% in the most recent contract talks with at least two major customers. Compounding this, MEMC looks overvalued, according to Arcuri; at today's opening, the stock was 17.5 times his 2005 EPS estimate of 90 cents. Despite the downgrade, the analyst raised his $1.17 2005 EPS estimate to $1.20 and his $15 price target to $16.50.


Race, Class, and the Future of Ferguson
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus