NEW YORK (AP) -- Shares of wind turbine component maker American Superconductor Corp. fell Monday after two analysts lowered their price targets on the stock and said the company's outlook remains challenged after losing a major customer.
THE SPARK: American Superconductor said Friday that it posted a net loss in the April-June quarter and its revenue fell 90 percent from a year ago as it lost business with China.
THE BACKGROUND: The company lost its largest customer, China's Sinovel Wind Group, after a formerAmerican Superconductor employee was arrested for selling trade secrets to Sinovel. The employee pleaded guilty to charges including economic espionage.
Earlier this month, American Superconductor said it was filing criminal and civil complaints in China against Sinovel on illegal use of intellectual property. American Superconductor is also seeking monetary compensation.
THE ANALYSIS: Baird analyst J. Michael Horwitz Jr. and Jefferies & Co. analyst Jesse Pichel lowered their price targets on the stock. Pichel lowered the stock's price target to $4 from $6 and reiterated his "Underperform" rating, saying that "the outlook for the company remains very challenged"
Horwitz lowered his price target to $6 from $7, and reiterated his "Neutral" rating. Horwitz said that a lawsuit against Sinovel "could be a drawn out struggle, and is likely to carry substantial legal fees."
SHARE ACTION: American Superconductor shares fell 42 cents, or 8.3 percent, to close at $4.66 Monday. The company's shares are down about 85 percent from a year ago.