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Shares of Ormat tumble as analyst downgrades stock to 'Hold' on 2010 product revenue view
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NEW YORK - Shares of Ormat Technologies Inc. tumbled on Friday as an analyst downgraded the stock, citing 2010 product revenue uncertainties.
Shares of Ormat, which designs, builds and runs geothermal plants, fell $2, or 5.2 percent, to $36.49 in morning trading.
On Wednesday the company reported earnings of 52 cents per share, beating street estimates of 37 cents per share. But looking to 2010, the company said that despite strength in 2009, its product segment's revenue would likely weaken in 2010, with a corresponding reduction in margins.
On Friday Jefferies & Co. analyst Paul Clegg raised concerns about the company's lack of visibility in the coming year.
"Upside from product revenues appear further out than we previously believed," he said, adding that the development pipeline has run into several delays on projects, prompting management to trim the expected size of future plants in the pipeline as they better analyze geothermal resources.
He downgraded the stock to "Hold" from "Buy" and lowered his price target to $42 from $45.
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