Gordon Johnson Is Bullish On This European Solar Company

Meyer Burger Technology AG MYBUF is a Swiss solar company that mainly focuses on photovoltaics but also has exposure to the semiconductor and optoelectronic industries and high-end markets based on semiconductor materials.

The Analyst

The Vertical Research Group's Gordon Johnson initiated coverage of Meyer Burger Technology's stock with a Buy rating and a price target equivalent to $2.67 per share. 

The Thesis

Despite returning more than 110 percent over the past year, shares of Meyer Burger have room for more upside, Johnson said in the initiation note.

This is justified by expectations for a "material increase" in the company's new orders and backlogs, the analyst said. PV prices are expected to continue moving lower through the first half of 2018 and, as a consequence, downstream vendors are "in an effective arms race to avoid becoming the marginal cost producer," Johnson said. 

The solar company's stock is likely to continue to outperform its peers over the next one-to-two-year period, the analyst said. The analyst's price target is based on a forward EV/EBITDA valuation that could be achieved by the close of 2018 and implies upside potential of nearly 30 percent, he said. 

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