Analysts' pick: Suzlon Energy
Citigroup Global Markets has maintained its 'sell' rating on the stock saying the company's international expansion drive has taken its toll.
Suzlon Energy
CMP: Rs 152.25
Target price: Rs 216
Citigroup Global Markets has maintained its ���sell��� rating on the stock saying the company���s international expansion drive has taken its toll in the form of supply delays; tower shortages in the international markets; key component shortages; and negative effects of foreign currency movements and nacelle custom duty changes in the US.
According to Citi, medium-term commodity price increases; delays in Suzlon���s WTG capacity ramp-up; the possibility of PTC not being extended and further provisions for blade damage problems may weigh heavily on the stock���s performance.
���The target price is based on 17 times December ���09E EPS (earnings per share), the low end of Suzlon���s 05-08 P/E (price to earnings) range of 17-47 times, given concerns about Suzlon���s S88 WTG,��� said Citi in a note to its clients.
���The recent EME (Edison Mission Energy) order cancellations and availability issues have taken the stock to its trough valuation of 17 times one-year forward earnings,��� the note said.
���We do not expect a significant re-rating until the company comes clean on its S88 turbine blade damages issue and establishes that it has a credible product to service its endmarkets without product liabilities,��� the Citi note added.
CMP: Rs 152.25
Target price: Rs 216
Citigroup Global Markets has maintained its ���sell��� rating on the stock saying the company���s international expansion drive has taken its toll in the form of supply delays; tower shortages in the international markets; key component shortages; and negative effects of foreign currency movements and nacelle custom duty changes in the US.
According to Citi, medium-term commodity price increases; delays in Suzlon���s WTG capacity ramp-up; the possibility of PTC not being extended and further provisions for blade damage problems may weigh heavily on the stock���s performance.
���The target price is based on 17 times December ���09E EPS (earnings per share), the low end of Suzlon���s 05-08 P/E (price to earnings) range of 17-47 times, given concerns about Suzlon���s S88 WTG,��� said Citi in a note to its clients.
���The recent EME (Edison Mission Energy) order cancellations and availability issues have taken the stock to its trough valuation of 17 times one-year forward earnings,��� the note said.
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���We do not expect a significant re-rating until the company comes clean on its S88 turbine blade damages issue and establishes that it has a credible product to service its endmarkets without product liabilities,��� the Citi note added.
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