Lazard Defends FuelCell Energy Ahead of Earnings (FCEL, FTEK)

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Lazard Capital Markets’ Sanjay Shrestha has come out defending FuelCell Energy (NASDAQ: FCEL) ahead of tomorrow’s earnings report.  The firm expects another strong quarter from the company.  It also notes a an attractive risk/reward metric and is maintaining its BUY rating.

Lazard has forecast revenues of $17 million and a loss per share of $(0.26), versus consensus of $16.2 million and $(0.26).  Here are some pending projects noted by Shrestha: "We expect FuelCell to report another solid quarter of additional bookings traction in key markets and ongoing cost/ kW reductions. During the quarter, the company announced more than 9MW of new awards, including a 3.9MW contract with the Linde Group and a 4.8MW order from POSCO Power."

Lazard is also looking for an update on the CT150 projects totaling 16.2MW recently approved by the Connecticut Department of Public Utility Control, and anticipates an update on the status of the 19.6MW Danbury "Triangle" project.

This target price of $15 represents more than a 100% gain from today’s prices and this stock has seen a 52-week trading range of $6.15 to $13.14.  This target reflects a 30x multiple on two potential revenue scenarios and EPS of $0.90-$1.20 over the next 4-6 years.

We would also note that Fuel Tech, Inc. (NASDAQ: FTEK) is scheduled to report earnings after the close tomorrow.  We recently gave a full preview on this one, and the companies are similar in name only.

Jon C. Ogg
March 4, 2008