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Cypress Semiconductor Corporation Message Board

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  • floppy_6 floppy_6 Feb 19, 2006 4:40 PM Flag

    Feb 25 SPWR cc

    The format doesn't allow me to paste it. so I re-type it as below. Not intended to pour cold shower, it is better to have all contra views. It is interesting this report issued one day after First Albany CC, either they kept a suspecious mind or they didn't attend.
    I haven't listened to cc, I will.


    Soleil: Great company, big risk, target: $31.50 based on 50 times of 2007 EPS 70 cents. F06 revenue 214 mils/31c, F07 revenue 350 mil/70 c. While Sunpower does have its poly requirement line up for 2006 ? under both long-term agreement and short-term deals, we believe that polysilicon shortage is so severe that odds are high (50%) that Sunpower will either see volume shortfalls or high-than-expected prices for polysilicon in 2006.
    While we believe the solar industry is going to be a very high growth industry 30-40% over the next five years, and looking for sunpower to grow substantially faster than the industry (i.e. gain market share), we nonetheless believe the company current valuation ? a P/E multiples of more than 50 on our 07 estimate ? is so stretched to leave no margin for negative surprises. And, we believe that negative surprises are more likely than not in 2006 given the severity of polysilicon shortage the solar industry is dealing with. We believe that investors should increase positions in Sunpower in the wake of disappointments that creates buying opportunity in the stock.

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