Estimates And PT For Energy Recovery Lowered

Piper Jaffray has published a research report on Energy Recovery, Inc. ERII after the company reduced its guidance once again, and thus Piper has lowered estimates. In the report, Piper Jaffray writes "We are lowering our estimates and price target following ERII's soft 3Q results and downward guidance revision. Weak project activity in the quarter – which saw the delay of 2 major projects – resulted in weaker than expected revenues and gross margins. Management did indicate on the call that competition seemed to be abating, thanks in part to a weaker dollar, but the majority of FY11 revenues are still expected to come from the OEM business. Based on the run rate in the OEM business and the projected shipments of devices in FY11, we are reducing our price target to $3.50, based on the same 2.5x FY11 revenues plus cash." Piper Jaffray maintains its Neutral rating and has lowered the price target from $4 to $3.50. Energy Recovery closed yesterday at $3.66.