TPI Composites slumps to 8-month low on forecast cut

TPI Composites

23/07/2021 15:00

** Composite wind blade maker's shares  TPIC.O  down 15% at
$35.55 after co sees hit to FY21 adj. EBITDA from higher raw
material costs, policy uncertainty
    ** Stock hits lowest since November 2020
    ** In its preliminary Q2 earnings report, co says it expects
FY adj. EBITDA of $70 mln-$85 mln vs previous estimate of $110
mln-$135 mln 
    ** Co now expects FY net sales of $1.75 bln-$1.8 bln vs
previous est. Of $1.75 bln-$1.85 bln 
    ** Co says decrease in demand is short term due higher raw
material costs, continued global renewable energy regulatory and
policy uncertainty (US Production Tax Credit extension, EU Fit
for 55)
    ** Multiple brokerages cut PT; JPMorgan slashes to Street
low of $46; says "government policy uncertainties can
potentially weigh on utility-scale solar timelines, though
likely to a lesser extent given the Investment Tax Credit's
longer-dated expiry"
    ** "While revenue is broadly fine, margin pressure from
input cost inflation is worse than we had expected. Much of this
looks transitory, but some impact on 2022 cannot be ruled out,"
Raymond James analysts write, cutting PT to $50 from $60
    ** Co also entered long-term agreement with Nordex in Mexico
to produce wind blades 
    ** Stock down ~33% YTD 

 (Reporting by Sruthi Shankar)
 ((sruthi.shankar@thomsonreuters.com;))