Evergreen Solar shares surge on supply deals

A Lehman Brothers analyst raised his target price on the stock and predicted his Wall Street colleagues will soon raise their earnings forecasts for the company. That move added fuel to a rally that extended a week of gains.

The contracts with White River Junction, Vt.-based groSolar and Germany's Wagner & Co Solartechnik GmbH that were announced late Wednesday run through 2012 and have a combined value of about $600 million.

Lehman analyst Vishal Shah said more than 65 percent of Evergreen's anticipated production in 2012 is now locked in with long-term contracts, adding visibility to the company's earnings for years to come.

Shah increased his target price by a dollar, or 9 percent, to $12 per share, due to the increased visibility.

The move came ahead of a meeting Evergreen planned to hold with analysts at its facility in Devens, Mass. Shah, who rates the stock "Equal weight," said he expected other analysts to raise their earnings estimates following the event.

"With manufacturing ramp on-schedule, we expect focus to be on cost, technology differentiation and (spending) requirements. We also expect presentations to focus on Evergreen's competitive advantage in terms of access to silicon supply, low cost structure and ability to enter into (long-term) take-or-pay contracts," Shah wrote in a note to investors previewing the meeting.

Evergreen shares jumped $1.81, or 17.7 percent, to $12.05 in early afternoon trading.