UPDATE: Bank of America Downgrades A123 Systems to Underperform

Bank of America cuts its rating on A123 Systems

to Underperform with a $1.50 price target due to continued disappointment and fundamental headwinds. Bank of America says, "There is long-term potential, in our view, but the short-term risk keeps rising, specifically: (1) continued cost overruns and charges, (2) the likely need to raise more money by year end, and (3) delayed filing of the 10-K. There is little visibility or transparency in the business. From a fundamental perspective, we are concerned that (1) the electric vehicle business may develop too slowly with too intense competition, and (2) A123's focus on ancillary services is one of the smaller applications in the grid storage world and perhaps not best suited for lithium-ion batteries. AONE closed at $1.90 a share yesterday.