Merrill: Sell SunPower and Evergreen on Account of Pending German Subsidy Cuts

5/29 - "Shares of solar power technology firms are tanking following a note from Merrill Lynch analyst Mark Heller cutting his rating on SunPower (SPWR) and Evergreen Solar (ESLR) from “Neutral” to “Sell” because Germany’s government may cut subsidies for solar by as much as 25%...According to the Bloomberg account of things, Heller thinks analysts’ expectation of a 16% cut is too low. "An increasing number of politicians are advocating a bigger cut to the German solar subsidy due to the escalating cost,” Bloomberg quotes a Merrill analyst, Matthew Yates, as writing in the report."

"In the Merrill Report, which just appeared over the transom, I note that First Solar (FSLR) is kept at a “Buy” rating, while lowering the bank’s price target on the shares to $325 from $360. First Solar is somewhat insulated from subsidy cuts, think Heller & Co., because its superior cost structure “is at least 2 years ahead of the competition..."