Power-One, Inc. (PWER)

[eastunder]

Jefferies Cuts Price Target on Power-One (PWER) As Company Lowers Giudance

7:54 am ET 04/07/2011-

Jefferies is lowering its price target form $12 to $10 on shares of Power-One (NASDAQ: PWER) as a result of the company cutting its Q1 guidance. The firm is maintaining its Buy rating as its new price target still allows for a 20.6% upside.

The company lowered its Q1 revenue guidance from $260-$290 million to $240-$245. PWER experienced weakness in Germany and Italy, and in particular from large systems in Italy since late February as new ground based projects were put on hold pending policy changes.

The firm reports that, "the time it takes new systems to ramp under the new policy and permitting scheme in Italy will determine PWER's slope of recovery."

Jefferies is lowering its Q1 MW shipments from 780MW to 660MW and its Q1 revenue and EPS estimates from $271 million and $0.24 to $240 million and $0.16. The new Q1 estimates tweak its FY11 estimates from $1.18 billion and $1.05 to $1.12 billion and $0.90. The firm is also changing its FY12 estimates from $1.34 billion and $1.21 to $1.34 billion and $1.20, which is based on 4,4350MW.

Jefferies comment that, "Conclusion of Italian policy in next week or two and PWER analyst day on May 17 are upcoming catalysts. At the analyst day, the company should be able to provide more visibility to Q3. The read through is negative on inverter companies SMA and Satcon (Nasdaq: SATC), although SATC is less exposed to Europe (15%) than peers."