Needham upgraded American Superconductor (AMSC) to buy from hold, and set an $11 price target.
Analyst Jim Ricchiuti says he upgrades on his belief that the recent 21% selloff in AMSC shares over the past month is unwarranted, since there is no change to its business prospects. Given the company's approximate $88 million in cash and no debt, he says AMSC has considerable financial flexibility to move forward with the buildout of its 2G high temperature superconductor wire manufacturing line.
Over the near term, he thinks AMSC performance will hinge on order announcements, particularly in its wires business.
Ricchiuti sees 65 cents loss per share for fiscal year 2006 (March). Although he doesn't see the company reaching profitability until fiscal year 2007, he believes the risk-reward opportunity supports a buy rating.