MEMC upgraded on weak poly prices, shares jump

NEW YORK - MEMC Electronic Materials Inc., which supplies silicon wafers used in chips and solar cells, is poised to gain from cost reductions due to weakened polysilicon prices, a Citigroup analyst said in upgrading the stock.

Shares of the company climbed 58 cents, or 3.6 percent, to $16.71 in afternoon trading.

Citigroup analyst Timothy Arcuri said prices for polysilicon, a key raw material used in the production of solar cells, will likely remain pressured through the second half of the year. That means inventory should move well before polysilicon price increases occur, likely in mid-2010.

Despite near-term weakness in the solar sector, Arcuri predicted solid profit margins and said the company is as well positioned as First Solar Inc., the nation's largest solar panel maker.

Arcuri upgraded the company's stock to "Buy" from "Hold" and raised his price target to $24 from $15.

He more than doubled his outlook for fiscal 2009 profit to 34 cents per share from 16 cents, and lifted his 2010 outlook to $1.34 from about $1 per share.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.