Our review of the sector includes three equipment and component suppliers and seven solar panel makers: Applied Materials Inc. (NASDAQ: AMAT), MEMC Electronic Materials Inc. (NYSE: WFR), GT Advanced Technologies Inc. (NASDAQ: GTAT), First Solar Inc. (NASDAQ: FSLR), SunPower Corp. (NASDAQ: SPWR), Suntech Power Holdings Co. Ltd. (NYSE: STP), Trina Solar Ltd. (NYSE: TSL), LDK Solar Co. Ltd. (NYSE: LDK), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), and ReneSola Ltd. (NYSE: SOL).

Rather than looking for value plays in the industry perhaps we should instead look for potential survivors. At least five German solar PV suppliers have filed for bankruptcy and there have been reports that several of the second-tier players in China are failing as well. One German maker, SolarWorld AG, is leading an anti-dumping action against more than a hundred Chinese makers, and an initial ruling has imposed tariffs of around 35% on Chinese-made panels sold into the US. That won’t do anything but dampen demand further and cost US jobs in the solar panel installation business.

Applied Materials Inc. (NASDAQ: AMAT) traded at $10.47 and has a market value of around $13 billion. The consensus target price from Thomson Reuters is $13.64 and the 52-week range is $9.70-$13.94. Three months ago the target price was $14.47. Applied Materials has a dividend yield of 3.4%. The implied upside to the consensus target is 30%, and we note that the target is below the 52-week high.

MEMC Electronic Materials Inc. (NYSE: WFR) traded at $1.64 and has a market value of around $365 million. The consensus target price from Thomson Reuters is $5.24 and the 52-week range is $1.53-$10.61. Three months ago the target price was $6.14. MEMC does not pay a dividend. The implied upside to the consensus target is 220%, and we note that the target is far below the 52-week high.

GT Advanced Technologies Inc. (NASDAQ: GTAT) traded at $4.02 and has a market value of around $485 million. The consensus target price from Thomson Reuters is $8.82 and the 52-week range is $4.00-$17.50. Three months ago the target price was $12.70. GT does not pay a dividend. The implied upside to the consensus target is 120%, and we note again that the target is far below the 52-week high.

First Solar Inc. (NASDAQ: FSLR) traded at $14.42 and has a market value of around $1.2 billion. The consensus target price from Thomson Reuters is $25.29 and the 52-week range is $13.21-$142.22. Three months ago the target price was $43.55. First Solar does not pay a dividend. The implied upside to the consensus target is 75%, and we note again that the target is far below the 52-week high.

SunPower Corp. (NASDAQ: SPWR) traded at $5.23 and has a market value of around $615 million. The consensus target price from Thomson Reuters is $8.79 and the 52-week range is $4.94-$23.36. Three months ago the target price was $9.70. SunPower does not pay a dividend. The implied upside to the consensus target is 68%, and we note again that the target is far below the 52-week high.

Suntech Power Holdings Co. Ltd. (NYSE: STP) traded at $1.83 and has a market value of around $331 million. The consensus target price from Thomson Reuters is $2.39 and the 52-week range is $1.70-$8.50. Three months ago the target price was $2.57. Suntech does not pay a dividend. The implied upside to the consensus target is 31%, and we note again that the target is far below the 52-week high.

Trina Solar Ltd. (NYSE: TSL) traded at $5.83 and has a market value of around $408 million. The consensus target price from Thomson Reuters is $7.87 and the 52-week range is $5.01-$23.64. Three months ago the target price was $9.15. Trina Solar does not pay a dividend. The implied upside to the consensus target is 35%, and we note again that the target is far below the 52-week high.

LDK Solar Co. Ltd. (NYSE: LDK) traded at $2.53 and has a market value of around $347 million. The consensus target price from Thomson Reuters is $2.27 and the 52-week range is $2.54-$7.75. Three months ago the target price was $3.25. LDK does not pay a dividend. The current price is above the consensus target, but still below the target price in February and well below the 52-week high.

JA Solar Holdings Co. Ltd. (NASDAQ: JASO) traded at $0.95 and has a market value of around $192 million. The consensus target price from Thomson Reuters is $1.85 and the 52-week range is $0.89-$6.15. Three months ago the target price was $2.25. JA Solar does not pay a dividend. The implied upside to the consensus target is 95%, and we note again that the target is far below the 52-week high.

ReneSola Ltd. (NYSE: SOL) traded at $1.35 and has a market value of around $116 million. The consensus target price from Thomson Reuters is $1.98 and the 52-week range is $1.32-$7.65. Three months ago the target price is not available. ReneSola does not pay a dividend. The implied upside to the consensus target is 47%, and we note again that the target is far below the 52-week high.

The only dividend-paying company out of this group is Applied Materials — that fact alone makes it a better bet than any of the rest. The company thinks it will grow sales 16% in 2012, but that will probably include another decline in sales of solar cell-making equipment. Revenue from Applied’s solar business fell -62% in 2011, and there is simply no prospect of a turnaround of any size in the solar business this year. Applied’s potential upside of 30% is not unrealistic from a mathematical point of view, but from a practical point of view that upside is probably too high by at least half.

Of the panel makers, the best any can hope for is that the situation doesn’t get any worse. We noted yesterday that Maxim Group raised its rating on Trina Solar from ‘sell’ to ‘hold’. That’s known as “damning with faint praise.”

And based on the quarterly earnings reports we’ve seen so far, ReneSola offered the most hope, saying that it plans to reach a cost of $0.70/watt in the second quarter, which might bring its margins back out of negative territory. The operative word is ‘might’.

The apparent value in the solar sector represents a gamble more than anything else. The industry is too different now from what it was two years ago to make any sort of historical argument for one company over another. But one thing is certain — solar is no longer a growth sector, it is a contracting sector. What looks like a value investment today is really a survival bet.

Gold & Silver Miners with the Most Upside Value  

Major Oil Companies with the Most Upside Value

Industrials with the Most Upside Value  

Conglomerates with the Most Upside Value

Retail Stocks with Upside 

Semiconductor Stocks with Most Upside Value

Paul Ausick

Aflac Inc. (NYSE: AFL) Maintained Buy but cut target price down from $75 to $63 at Bank of America/Merrill Lynch.

Carrizo Oil & Gas Inc. (NASDAQ: CRZO) Reinstated as Neutral with $30 target at Credit Suisse.

eBay Inc. (NASDAQ: EBAY) Maintained Buy with $44 target at Bank of America/Merrill Lynch.

E-House China Holdings Limited (NYSE: EJ) Reinstated as Outperform at Credit Suisse.

First Solar, Inc. (NASDAQ: FSLR) Reiterated Buy with $30 target at Bank of America/Merrill Lynch.

The Hain Celestial Group, Inc. (NASDAQ: HAIN) Started as Buy at SunTrust Robinson Humphreys.

Lululemon Athletica (NASDAQ: LULU) Cut to Hold at KeyBanc.

PACCAR (NASDAQ: PCAR) named as Value stock of the day at Zacks.

Rogers Communications (NYSE: RCI) named Bear of the Day at Zacks.

Salesforce.com (NYSE: CRM) Raised to Outperform at Oppenheimer.

Siemens AG (NYSE: SI) Raised to Buy at Deutsche Bank.

SurModics, Inc. (NASDAQ: SRDX) named Bull of the Day at Zacks.

Symantec Corporation (NASDAQ: SYMC) Maintained Neutral with $20 target at Bank of America/Merrill Lynch.

Here were Thursday’s Five Highly Unusual Upgrades and Downgrades which really stood out or which moved stocks.

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JON C. OGG

Today brought five very unusual research reports: Baker Hughes Incorporated (NYSE: BHI); CYS Investments, Inc. (NYSE: CYS); NetApp, Inc. (NASDAQ: NTAP); RailAmerica, Inc. (NYSE: RA); and Trina Solar Limited (NYSE: TSL).  The summary on each call, the price reaction, and why the call was so unusual on each has been outlined below:

Baker Hughes Incorporated (NYSE: BHI) has been cut in half from its highs over the last year.  What has been happening though is that the stock has been trying to form a base here in the very low $40-handles after hitting a recent 52-week low of $39.40.  Societe Generale decided in its wisdom after the huge drop that has been seen that today was the day to downgrade its rating to HOLD from BUY.  Shares are were down 1.8% at $40.95 right before the close, but frankly this is one of those calls that so much bad news has been priced in that we wonder why the call is just today.

CYS Investments, Inc. (NYSE: CYS) hardly budged today but this call really stood out.  Bank of America Merrill Lynch reinstated new coverage here with a BUY rating and a price target of $13.75.  This is a mortgage REIT for residential agency MBS that pays a double-digit yield as of now and the call suggests that CYS will generate a 15% dividend yield in 2012 and it is only about 1.05-times book value.  The call must be solely based upon the dividend though because the stock closed at $13.77 yesterday and the Thursday late-day price was $13.85.  How often do you see a “Buy” rating when the price target is under the current price?  This analyst call is just highly unusual.

NetApp, Inc. (NASDAQ: NTAP) took several downgrades today after it gave a revenue and earnings warning.  We called this a new thing for NetApp as it represents the Death of Growth.  Shares were down over 12% in the final hour at $28.72 but a firm named FBN Securities actually likes this pullback and raised its ratings to “Outperform” from “Market Perform.”  NetApp traded over 50 million shares as well and hit a new 52-week low of $27.75 Thursday, so this is now a broken high-flyer that is now a battleground stock.

RailAmerica, Inc. (NYSE: RA) was down about 2.2% at $23.49 late in the day after J.P. Morgan cut the rating to Neutral from Overweight based upon valuation.  What makes this so interesting is that this is on the heels of buyout interest perhaps from Warren Buffett being reported earlier this week.

Trina Solar Limited (NYSE: TSL) is in the highly unloved solar sector and this stock is down over 75% from ist 52-week high.  Things got bad enough that it is now down under $500 million in market value.  Still, today brought a gain of 5.2% to $5.84 after Maxim Group simply removed its SELL rating and gave a new HOLD rating in an upgrade.  A “Hold” rating is often considered the same as a “Sell” rating by many investors.

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JON C. OGG

William Blair cut its target to $90.00 and J.P. Morgan cut its target to $85.00 from $92.00. Jefferies set a much more conservative target price of $74 in the middle of May, so today’s move may simply be a catch-up trade.  Barclays cut the target down to $96 in early May. It is probably worth noting that today’s price target cuts are just a week ahead of the earnings report due on May 31, 202.

Today’s price target cuts still show upside in the stock with a consensus price target of $97.19 from Thomson Reuters, but that may be a figure which has not been updated since these two price target cuts were made.

Shares were at $89.71 at the end of February after another drop and the talk was that Joy Global could have been a takeover target back then.  If some were hoping that a buyout would come when the stock was at $89.00 or so, they must really love the thought of a buyout when shares are closer to $60.00.  It was the acquisition of Bucyrus by Caterpillar Inc. (NYSE: CAT) for a sum of $7.6 billion that caused some secondary and tertiary buyout hopes.  The equity market capitalization of Joy Global today is just under $6.4 billion.

Joy Global shares are down 6.3% at $60.00 and the 52-week range is $57.48 to $101.44.  This one has traded under $60.00 briefly today.

Joy Global operates under the two units of P&H Mining Equipment and Joy Mining Machinery, where it manufactures and markets original equipment and aftermarket parts and services for both the underground and above-ground mining industries and certain industrial applications.

JON C. OGG

Analog Devices Inc. (NYSE: ADI) Reiterated Buy with $43 target at Argus.

ARM Holdings PLC (NASDAQ: ARMH) Raised to Buy at S&P.

Assured Guaranty (NYSE: AGO) Raised to Buy at UBS.

Baker Hughes Inc. (NYSE: BHI) Cut to Hold at Societe Generale.

Dean Foods Co. (NYSE: DF) named as Bull of the Day in its turnaround at Zacks.

Dell Inc. (NASDAQ: DELL) Maintained Buy but target cut to $18 from $22 at Argus.

Duke Energy Corporation (NYSE: DUK) Raised to Buy at UBS.

Eaton Vance (NYSE: EV) Raised to Neutral from Sell at Citigroup.

Express Inc. (NYSE: EXPR) Started as Neutral at JPMorgan.

Hewlett-Packard Co. (NYSE: HPQ) Maintained Neutral but raised 2012/2013 estimates by 2% at Credit Suisse.

Human Genome Sciences Inc. (NASDAQ: HGSI) Cut to Market Perform with a price target of $13.00 at BMO Capital.

Iridium Communications Inc. (NASDAQ: IRDM) Started as Buy at CRT Capital.

MetLife Inc. (NYSE: MET) Reiterated Buy with $46 target at Argus.

National Oilwell Varco (NYSE: NOV) Raised to Buy at Societe Generale.

OCZ Technology Group Inc (NYSE: OCZ) Started as Outperform with $8 target at Credit Suisse.

RadioShack Corporation (NYSE: RSH) named as Bear of the Day at Zacks.

RailAmerica Inc. (NYSE: RA) Cut to Neutral at JPMorgan.

Three calls seen on NetApp (see here).

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Applied Materials Inc. (NASDAQ: AMAT) Raised to Neutral at Goldman Sachs.

Ariba Inc. (NASDAQ: ARBA) Cut to Neutral at Goldman Sachs.

The Blackstone Group LP (NYSE: BX) Raised to Buy at Stern Agee.

Capella Education Co. (NASDAQ: CPLA) named Bear of the Day at Zacks.

China Telecom (NYSE: CHA) Raised to Outperform at Credit Suisse.

Dell Inc. (NASDAQ: DELL) Cut to Neutral at Mizuho; Maintained Underperform and target cut to $14 at Credit Suisse.

Dendreon Corporation (NASDAQ: DNDN) Started as Underperform at Jefferies; Maintained Hold with $11 target at Canaccord Genuity.

EMC Corp. (NYSE: EMC) Reiterated Buy with $36 target at Argus.

Facebook, Inc. (NASDAQ: FB) Started as Buy with $40 target at Needham.

GATX Corporation (NYSE: GMT) named Bull of the Day at Zacks.

IntercontinentalExchange, Inc. (NYSE: ICE) Raised to Buy at Deutsche Bank.

Jazz Pharmaceuticals (NASDAQ: JAZZ) Started as Outperform at Credit Suisse.

NASDAQ OMX Group (NASDAQ: NDAQ) Cut to Hold at Deutsche Bank.

Patriot Coal (NYSE: PCX) Cut to Hold at Deutsche Bank.

Procter & Gamble Co. (NYSE: PG) Reiterated Buy with $70 target at Argus.

Starbucks Corporation (NASDAQ: SBUX) Raised to Buy at BofA/ML.

Weyerhaeuser Co. (NYSE: WY) Started as Buy at Goldman Sachs.

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Moody’s went on to note that Ford’s Corporate Family and Probability of Default Ratings, as well as its Speculative Grade Liquidity rating, are withdrawn.   Where this rating gets interesting is that Ford’s secured credit facility was lowered to Baa3 from Baa2 in anticipation of the imminent fall away of the bank agreement’s security interest.  Moody’s said, “This fall away, which would be consistent with the facility’s terms, would result in any outstandings being pari passu with Ford’s other senior unsecured debt.”

Today’s upgrade is based on Ford’s position in North America, as well as its robust liquidity position and the expectation that the company will continue to embrace sound operating and financial disciplines.

Moody’s even made some inference that Ford will weather the storm: “We believe that these strengths will enable Ford to maintain an investment grade profile in the face of the sector’s ongoing cyclicality and weakness in the European market.”

Ford closed down 0.1% at $10.19 but the stock was up 1.2% at $10.33 in the after-hours session.

JON C. OGG

Moody’s said in its report, “GM’s credit quality continues to improve and the company remains on track to regain an investment grade credit rating over the course of the next 12 months.”   The outlook and rating reflect the highly competitive North American business model that the company is expected to maintain.  Moody;’s expects that GM will leverage its improved cost structure as it brings new product introductions to market.

Another positive is that the company has a strong position in high-growth Asian markets such as China. Here is where investors should just go ahead and expect an upgrade as long as the global slowing doesn’t get too deeply in the way: “These strengths should enable GM to generate credit metrics that could be supportive of an investment grade rating in the near term.”

Some challenges with the current Ba1 rating are execution risks, increasing the use of global platforms, and improving the competitive position of its European operations.  Moody’s also included, “Upward movement in GM’s rating could be supported if the company continues to execute its operating and financial plan, and if there is moderation in the economic and financial uncertainty in Europe.”

GM shares closed won 0.2% at $21.50 today, but shares are up 0.7% at $21.65.  Is it possible to have an investment grade rating when the U.S. taxpayers own such a large stake in GM?

JON C. OGG

Refiners are no better off: Valero Energy Corp. (NYSE: VLO) is down -7.7% in the past month, Marathon Petroleum Corp. (NYSE: MPC) is down about -9.8%, while Tesoro Corp. (NYSE: TSO) is up a bare 0.4%. Refiners have been surviving off the wide differential between WTI and Brent crudes and as the differential narrows, profits are harder to come by.

For the integrated oil companies, the price of crude has been the determining factor in a company’s profit picture: the higher the price, the bigger the profit. That makes sense. For the services company, higher prices typically mean more work as producers want to get more oil to sell.

Because crude prices are at a seven-month low now, we thought it would be interesting to look for value in some of the big oil stocks. After all, low crude prices mean share sell-offs, so there ought to be some value left on the table.

With the exceptions of Exxon and Chevron, all the companies we looked at have implied gains exceeding 30% if analysts have gotten target prices right. That’s some pretty good value, but we thought we’d try to handicap the race a bit more closely.

Exxon Mobil Corp. (NYSE: XOM) traded at $82.21 and has a market value of $383 billion. The consensus target price from Thomson Reuters is $94.53 and the 52-week range is $67.03 to $87.94. Exxon has a dividend yield of 2.8%. The implied upside to the consensus target is 15%, but we would note that the target is above the 52-week high.

Chevron Corp. (NYSE: CVX) traded at $99.71 and has a market value of $196 billion. The consensus target price from Thomson Reuters is $124.88 and the 52-week range is $86.68 to $112.28. Chevron has a dividend yield of 3.7%. The implied upside to the consensus target is 25%, but we would note again that the target is above the 52-week high.

BP plc (NYSE: BP) traded at $38.26 and has a market value of $121 billion. The consensus target price from Thomson Reuters is $53.25 and the 52-week range is $33.62 to $48.34. BP has a dividend yield of 5.2%. The implied upside to the consensus target is 39%, but we would note again that the target is above the 52-week high.

Schlumberger Ltd. (NYSE: SLB) traded at $67.47 and has a market value of $89 billion. The consensus target price from Thomson Reuters is $89.20 and the 52-week range is $54.79 to $95.53. Schlumberger has a dividend yield of 1.7%. The implied upside to the consensus target is 32%, and the target price is lower than the 52-week high.

Halliburton Co. (NYSE: HAL) traded at $31.40 and has a market value of about $29 billion. The consensus target price from Thomson Reuters is $47.28 and the 52-week range is $27.21 to $57.77. Halliburton has a dividend yield of 1.2%. The implied upside to the consensus target is 51%, and again the target price is lower than the 52-week high.

Baker Hughes Inc. (NYSE: BHI) traded at $42.20 and has a market value of about $18 billion. The consensus target price from Thomson Reuters is $56.33 and the 52-week range is $39.40 to $81.00. Baker Hughes has a dividend yield of 1.5%. The implied upside to the consensus target is 33%, and again the target price is well below the 52-week high.

Valero Energy Co. (NYSE: VLO) traded at $22.17 and has a market value of about $12 billion. The consensus target price from Thomson Reuters is $30.15 and the 52-week range is $16.40 to $28.68. Valero has a dividend yield of 2.8%. The implied upside to the consensus target is 36%, and again the target price is above the 52-week high.

Marathon Petroleum Corp. (NYSE: MPC) traded at $36.38 and has a market value of about $12 billion. The consensus target price from Thomson Reuters is $52.50 and the 52-week range is $26.35 to $47.43. Marathon has a dividend yield of 2.9%. The implied upside to the consensus target is 44%, and again the target price is above the 52-week high.

Tesoro Corp. (NYSE: TSO) traded at $23.49 and has a market value of about $3 billion. The consensus target price from Thomson Reuters is $31.36 and the 52-week range is $17.43 to $30.15. Tesoro does not pay a dividend. The implied upside to the consensus target is 34%, and again the target price is above the 52-week high.

For comparison, The SPDR S&P Oil & Gas Exploration and Production ETF (AMEX: XOP) traded at $50.45 in a 52-week range of $37.67 to $65.58. That’s about 30% below the 52-week high. The Market Vectors Oil Services ETF (AMEX: OIH) traded at $37.47 in a 52-week range of $35.32 to $45.14, again about 30% below the 52-week high.

Target prices for the large integrated oil companies are above 52-week highs, as are target prices for the refiners. Unless the price of crude rises sharply, the targets are out of reach for the integrated companies. For refiners, they’re whipsawed if prices for WTI open a bigger gap versus Brent or if WTI rise and Brent falls. No chance at those targets either way.

Targets for the services companies are lower than 52-week highs, which improves the chances of hitting those targets. Schlumberger, the largest of the services companies, and Baker Hughes both look appear to have the best chance to boost their share prices.

Paul Ausick

ABIOMED Inc. (NASDAQ: ABMD) Cut to Neutral at Lazard Capital.

ArcelorMittal (NYSE: MT) named Bear of the Day at Zacks.

Boston Properties Inc. (NYSE: BXP) Reiterated Buy with target price of $120 at Argus.

Domino’s Pizza Inc. (NYSE: DPZ) Reiterated Buy with target price of $46 at Argus.

DryShips Inc. (NASDAQ: DRYS) Started as Buy at Global Hunter.

Forum Energy Technologies, Inc (NYSE: FET) Started as Outperform with $28.00 target price at Credit Suisse; Started as Outperform at Howard Weil; Started as Buy at Citigroup.

Gap Inc. (NYSE: GPS) Raised to Buy at Lazard Capital.

Infoblox Inc. (NYSE: BLOX) Started as Buy with $21 target at UBS.

LyondellBasell Industries (NYSE: LYB) Started as Outperform with $60.00 target at Credit Suisse.

Oaktree Capital Group, LLC (NYSE: OAK) Started as Neutral with $45.00 target at Credit Suisse; Started as Buy at Goldman Sachs; Started as Neutral at JPMorgan.

Pool Corporation (NASDAQ: POOL) raised to Bull of the Day at Zacks.

Synta Pharmaceuticals Corp. (NASDAQ: SNTA) Started as Buy at Jefferies.

Tesla Motors, Inc. (NASDAQ: TSLA) Started as Buy at Maxim Group.

Urban Outfitters (NASDAQ: URBN) Maintained as HOLD with $26 target price but lower estimates at Canaccord Genuity.

Watson Pharmaceuticals Inc. (NYSE: WPI) Reiterated Buy with $90 target as “Top Idea Post” at Canaccord Genuity.

Zipcar, Inc. (NASDAQ: ZIP) Started as Overweight at Morgan Stanley.

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JON C. OGG