Wedbush Initiates Coverage On American Superconductor at Neutral

According to Wedbush, American Superconductor AMSC coverage is initiated at Neutral. Wedbush reported that Management achieved solid success in global wind markets; however, its investment focus is on the Superconductors segment, given the relative growth opportunity vs. deceleration in served wind markets. “We believe AMSC's high-temperature superconducting (HTS) technology could offer long-term growth in multi-billion dollar potential end markets. HTS project activity is increasing, and a rising Power Grid backlog suggests AMSC may be approaching a demand inflection point. The near-term capacity expansion for HTS wire, where the focus remains product yields and performance, suggests Superconductors losses could increase before they subside, so we will closely monitor results looking for an attractive entry point. Establishing a $25 price target, using a 20x multiple on FY12 EPS estimates. We see a 20x multiple as reasonable on AMSC's success diversifying its customer base and the outlook for the resumption of EPS growth in FY12. Normalizing EPS for losses in the Superconductors segment, AMSC is trading at 15.6x and 15.9x '11 and ‘12 calendarized EPS, inline with wind comps. When we have better visibility on Superconductors segment profitability we will look to add that to our valuation.” American Superconductor closed yesterday at $23.67.