Sep 22, 2011 - SEB Enskilda forecast in an update tough times for the solar energy market, yet is confident in the share of Norwegian sector group Renewable Energy Corp (OSL:REC).
The broker has a "buy" recommendation and a share price target of NOK 15, which implies a doubling of the current quotation.
"The cost race is continuing and the sector players, which will manage best will be those which are low on the cost curve (such as REC Silicon and REC Solar) and have strong balance sheets," SEB Enskilda said.
Therefore, the broker expects that REC will be one of the companies which will manage well through an expected tough period in the sector.
According to the broker, global demand will rise from 22 GW in 2011 to 24 GW in 2012 and to 29 GW in 2013.
At the same time, SEB expects that the supply side will grow and raised its estimates for polysilicon capacity by 9% for 2011, 18% for 2012 and 34% for 2013.
SEB expects a supply-driven polysilicon- and solar market in the next couple of years, in which the spot prices for polysilicon can drop towards USD 25-30 per kg in 2012.
By 1137 CET today, shares in REC had lost 3.97% to NOK 6.530 on the Oslo Stock Exchange (OSE).