In a research report published Thursday, Wolfe Research analyst Gordon Johnson initiated coverage on shares of Yingli Green Energy Holding Co. Ltd. (YGE) (NYSE:YGE) with an Underperform rating and a $1.19 price target, which represents a potential downside of 36% from where the stock is currently trading.

Johnson noted, "We see material stock risk based upon our view that China will once again fall short of its solar installation target due to curtailment, lack of funding and weakening demand for roof top installations. We view YGE as a compelling short given its rising BS leverage and EBITDA likely insufficient to cover its interest expense."

Furthermore, "Assuming a 70/30 debt/equity split for YGE’s planned 500W of on-balance-sheet-built projects, we see a dilutive equity raise as a strong near-term possibility similar to a year ago. Our C15- 16 EPS estimates are meaningfully below Cons., and applying a mid-cycle EV/EBITDA multiple of 7.7x, at year-end C15 implies a $1.19 target price or 36.7% downside."

According to, which measures analysts' and bloggers' success rate based on how their calls perform, analyst Gordon Johnson has a total average return of 18.8% and a 69.2% success rate. Johnson has a 51.9% average return when recommending YGE, and is ranked #159 out of 3564 analysts.


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