August 10, 2009
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View August 10, 2009 as PDF for free.
More details
- Words: 1,569
- Pages: 4
August 10, 2009
Industry Report
Think Greentech Takeaways On Smart Grid Conference Call With Jesse Berst
Reason for Report: Industry Update Colin Rusch 212-468-7015, [email protected]
THINK SUMMARY: Below are our takeaways from our conference call with Jesse Berst, Managing Director, Global Smart Energy on smart grid technologies. Mr. Berst's thoughts included the following: KEY POINTS: • Berst framed comments on smart grid by stating that an upgrade of the U.S. electricity infrastructure could be a primary driver for the U.S. economy over coming decades. • Primary policy drivers are expected to be dynamic retail electricity pricing and decoupling. • Mr. Berst expressed his view that the most economically-efficient smart grid path would be to (a) install a system-wide communications infrastructure, (b) invest in transmission and distribution automation to improve asset efficiencies, and then (c) add home energy management networks. • Standard-setting process still in progress, may complicate product and company positioning in the next 12-24 months. • While some technologies are starting to emerge, diversified end-markets leave room for multiple technology winners. • Adoption of intermittent renewables sources will likely coincide with adoption of smart grid technologies, given potential intermittency-related instabilities. Key Drivers Affecting The Smart Grid • On near-term policy drivers, Mr. Berst indicated that there is strong federal support and growing state regulatory support for 1) dynamic electricity pricing that reflects time-based differences in the cost of power and 2) decoupling of utility revenues from electricity sales volume. These drivers would help to create demand for smart meters and energy efficiency/demand response. • Longer-term, Mr. Berst noted the potential of a carbon price to improve the economics of efficient asset management, and suggested that the federal government could push for standardized building energy codes and other regulatory harmonies that currently affect utilities operating in multiple states and jurisdictions. • Mr. Berst expressed his view that the most economically efficient smart grid path would be to (a) install a system-wide communications infrastructure, (b) invest in transmission and distribution automation to improve asset efficiencies, and then (c) add home energy management networks. • However, he indicated that aggressive marketing from meter companies, directed policy support in the federal stimulus bill, and the reluctance of regulators to include new technologies in rate bases has pushed investment toward smart metering and home area networks. • He expressed concern that smart grid companies would have to adapt to more than 35 mandated standards in the next 18 months due to the standards-development process led by the National Institute of Standards and Technology (NIST). According to Mr. Berst, many providers are unprepared to move to more open protocols and non-proprietary technology solutions. • Mr. Berst noted that the growth of intermittent renewables is a strong driver for smart grid investment. Instabilities could materialize with roughly 5% intermittent renewables penetration and are unavoidable at levels of 15-20% without smarter load management. Takeaways continue on page 2. Please see analyst certification (Reg. AC) and other important disclosures on pages 3-4 of this report.
August 10, 2009
Industry Report
Mr. Berst's thoughts also included the following: Smart Metering Markets And Communications Architecture • Mr. Berst noted that there has been significant push-back against smart metering deployments from consumer groups such as the AARP. • He believes that markets would continue to grow in areas with regulatory support, high electric rates, and high growth of renewables, including California, Texas, Hawaii, and the Northeast. • Mr. Berst predicted that, while most utilities have leaned toward RF mesh technologies for smart communications, cellular networks may take on a much-larger role in the future. He cited as an example the recent agreement by Verizon and QUALCOMM, which could encourage the spread of small chips to let smart devices easily connect to the cell network at cheaper rates. • He expressed the belief that fiberoptics would be useful for connecting utility backhauls, but was not necessary for residential connections. • He questioned the market readiness of broadband-over-powerline technologies and indicated that significant technical problems persist. • Mr. Berst suggested that the best markets for powerline technologies were in rural areas and in Europe, where many more homes are connected to a single transformer. Demand Response • Mr. Berst observed that demand-response management companies were facing increasing pressure from customers—particularly commercial and industrial customers—to pass on a larger share of electricity savings. • He noted the risk that larger utilities could seek to assume more of the energy management/DR functions on their own and/or pool together with other utilities to increase DR capability. • He observed that DR companies were lobbying heavily for increased federal and state regulatory support (i.e., decoupling, time-based rates, and incentives for DR). • Mr. Berst expressed the view that companies with more open platforms and add-on capability from third parties would have a competitive advantage going forward. Emerging Opportunities • In Mr. Berst's view, the biggest opportunity on the grid exists for companies that can aggregate distributed resources—not only demand response, but also distributed generation, storage, and battery banks—and can use these resources as a portfolio to do load balancing. • He believes that there will be a strong demand for systems integration, enterprise-wide systems architecture solutions, and geospatial platforms that can measure and control the efficiency of transmission operations. RISKS: Industry risks include: global macro risk, financing risk, customer concentration risk, subsidy risk, technology risk, and increased competition.
Page 2
August 10, 2009
Industry Report
COMPANIES MENTIONED IN THIS REPORT: Company
Exchange
Symbol
Price
Rating
Price Target
NASDAQ
QCOM
$45.97
Buy
$55.00
QUALCOMM Inc.
Important Research Disclosures Analyst Certification I, Colin Rusch, hereby certify that all of the views expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this research report. The analyst(s) responsible for preparing this report has/have received compensation based on various factors, including the firm's total revenues, a portion of which is generated by investment banking activities. ThinkEquity LLC makes a market in QUALCOMM Inc. securities; and/or associated persons may sell to or buy from customers on a principal basis.
Rating and Price Target History for: QUALCOMM Inc. (QCOM) as of 08-07-2009 03/14/07 B:$50.00
04/26/07 B:$55.00
05/18/07 B:$60.00
11/09/07 B:$50.00
06/05/08 B:$60.00
07/25/08 B:$65.00
10/29/08 B:$50.00
01/08/09 B:$48.00
01/29/09 B:$45.00
04/13/09 B:$50.00
04/28/09 B:$55.00
60
50
40
30
Q3
Q1 2007
Q2
Q3
Q1 2008
Q2
Q3
Q1
Q2
20
2009
Created by BlueMatrix
Rating Definitions The ThinkEquity LLC rating system is based on a stock's expected total return over a 12-month investment horizon. Ratings on coverage are defined as follows: Buy: Appreciation potential of 20% or more over the next 12 months. Analyst has a high level of conviction that the company's business fundamentals are intact and that the company will meet or exceed earnings projections. Valuation is considered reasonable considering the company's potential. Accumulate: Appreciation potential greater than 0% and less than 20% over the next 12 months. Typically good companies, with fundamentals and earnings visibility intact, but current valuation limits upside potential. Source of Funds: Stock is expected to decline as much as 20% over the next 12 months, due to a single or combination of factors including excessive valuation, negative sector sentiment, and/ or reduced earnings expectations. Sell: Stock expected to decline 20% or more over the next 12 months. Company fundamentals are deteriorating, leading to material downward revisions in earnings projections and valuation. Distribution of Ratings, Firmwide
Page 3
August 10, 2009
Industry Report
ThinkEquity LLC IB Serv./Past 12 Mos. Rating
BUY [B] HOLD [Acc] SELL [S/SoF]
Count
Percent
Count
Percent
102 78 23
50.20 38.40 11.40
13 5 0
12.75 6.41 0.00
This report does not purport to be a complete statement of all material facts related to any company, industry, or security mentioned. The information provided, while not guaranteed as to accuracy or completeness, has been obtained from sources believed to be reliable. The opinions expressed reflect our judgment at this time and are subject to change without notice and may or may not be updated. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. This notice shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which said offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state. This research report was originally prepared and distributed to institutional clients of ThinkEquity LLC. Recipients who are not market professionals or institutional clients of ThinkEquity LLC should seek the advice of their personal financial advisors before making any investment decisions based on this report. Additional information on the securities referenced is available upon request. In the event that this is a compendium report (covers more than six ThinkEquity LLC-covered subject companies), ThinkEquity LLC may choose to provide specific disclosures for the subject companies by reference. For more information regarding these disclosures, please send a request to: Director of Research, ThinkEquity LLC, 600 Montgomery Street, San Francisco, California, 94111. Stocks mentioned in this report are not covered by ThinkEquity LLC unless otherwise mentioned. Member of the FINRA and SIPC. Copyright 2009 ThinkEquity LLC, A Panmure Gordon Company
Page 4
Industry Report
Think Greentech Takeaways On Smart Grid Conference Call With Jesse Berst
Reason for Report: Industry Update Colin Rusch 212-468-7015, [email protected]
THINK SUMMARY: Below are our takeaways from our conference call with Jesse Berst, Managing Director, Global Smart Energy on smart grid technologies. Mr. Berst's thoughts included the following: KEY POINTS: • Berst framed comments on smart grid by stating that an upgrade of the U.S. electricity infrastructure could be a primary driver for the U.S. economy over coming decades. • Primary policy drivers are expected to be dynamic retail electricity pricing and decoupling. • Mr. Berst expressed his view that the most economically-efficient smart grid path would be to (a) install a system-wide communications infrastructure, (b) invest in transmission and distribution automation to improve asset efficiencies, and then (c) add home energy management networks. • Standard-setting process still in progress, may complicate product and company positioning in the next 12-24 months. • While some technologies are starting to emerge, diversified end-markets leave room for multiple technology winners. • Adoption of intermittent renewables sources will likely coincide with adoption of smart grid technologies, given potential intermittency-related instabilities. Key Drivers Affecting The Smart Grid • On near-term policy drivers, Mr. Berst indicated that there is strong federal support and growing state regulatory support for 1) dynamic electricity pricing that reflects time-based differences in the cost of power and 2) decoupling of utility revenues from electricity sales volume. These drivers would help to create demand for smart meters and energy efficiency/demand response. • Longer-term, Mr. Berst noted the potential of a carbon price to improve the economics of efficient asset management, and suggested that the federal government could push for standardized building energy codes and other regulatory harmonies that currently affect utilities operating in multiple states and jurisdictions. • Mr. Berst expressed his view that the most economically efficient smart grid path would be to (a) install a system-wide communications infrastructure, (b) invest in transmission and distribution automation to improve asset efficiencies, and then (c) add home energy management networks. • However, he indicated that aggressive marketing from meter companies, directed policy support in the federal stimulus bill, and the reluctance of regulators to include new technologies in rate bases has pushed investment toward smart metering and home area networks. • He expressed concern that smart grid companies would have to adapt to more than 35 mandated standards in the next 18 months due to the standards-development process led by the National Institute of Standards and Technology (NIST). According to Mr. Berst, many providers are unprepared to move to more open protocols and non-proprietary technology solutions. • Mr. Berst noted that the growth of intermittent renewables is a strong driver for smart grid investment. Instabilities could materialize with roughly 5% intermittent renewables penetration and are unavoidable at levels of 15-20% without smarter load management. Takeaways continue on page 2. Please see analyst certification (Reg. AC) and other important disclosures on pages 3-4 of this report.
August 10, 2009
Industry Report
Mr. Berst's thoughts also included the following: Smart Metering Markets And Communications Architecture • Mr. Berst noted that there has been significant push-back against smart metering deployments from consumer groups such as the AARP. • He believes that markets would continue to grow in areas with regulatory support, high electric rates, and high growth of renewables, including California, Texas, Hawaii, and the Northeast. • Mr. Berst predicted that, while most utilities have leaned toward RF mesh technologies for smart communications, cellular networks may take on a much-larger role in the future. He cited as an example the recent agreement by Verizon and QUALCOMM, which could encourage the spread of small chips to let smart devices easily connect to the cell network at cheaper rates. • He expressed the belief that fiberoptics would be useful for connecting utility backhauls, but was not necessary for residential connections. • He questioned the market readiness of broadband-over-powerline technologies and indicated that significant technical problems persist. • Mr. Berst suggested that the best markets for powerline technologies were in rural areas and in Europe, where many more homes are connected to a single transformer. Demand Response • Mr. Berst observed that demand-response management companies were facing increasing pressure from customers—particularly commercial and industrial customers—to pass on a larger share of electricity savings. • He noted the risk that larger utilities could seek to assume more of the energy management/DR functions on their own and/or pool together with other utilities to increase DR capability. • He observed that DR companies were lobbying heavily for increased federal and state regulatory support (i.e., decoupling, time-based rates, and incentives for DR). • Mr. Berst expressed the view that companies with more open platforms and add-on capability from third parties would have a competitive advantage going forward. Emerging Opportunities • In Mr. Berst's view, the biggest opportunity on the grid exists for companies that can aggregate distributed resources—not only demand response, but also distributed generation, storage, and battery banks—and can use these resources as a portfolio to do load balancing. • He believes that there will be a strong demand for systems integration, enterprise-wide systems architecture solutions, and geospatial platforms that can measure and control the efficiency of transmission operations. RISKS: Industry risks include: global macro risk, financing risk, customer concentration risk, subsidy risk, technology risk, and increased competition.
Page 2
August 10, 2009
Industry Report
COMPANIES MENTIONED IN THIS REPORT: Company
Exchange
Symbol
Price
Rating
Price Target
NASDAQ
QCOM
$45.97
Buy
$55.00
QUALCOMM Inc.
Important Research Disclosures Analyst Certification I, Colin Rusch, hereby certify that all of the views expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this research report. The analyst(s) responsible for preparing this report has/have received compensation based on various factors, including the firm's total revenues, a portion of which is generated by investment banking activities. ThinkEquity LLC makes a market in QUALCOMM Inc. securities; and/or associated persons may sell to or buy from customers on a principal basis.
Rating and Price Target History for: QUALCOMM Inc. (QCOM) as of 08-07-2009 03/14/07 B:$50.00
04/26/07 B:$55.00
05/18/07 B:$60.00
11/09/07 B:$50.00
06/05/08 B:$60.00
07/25/08 B:$65.00
10/29/08 B:$50.00
01/08/09 B:$48.00
01/29/09 B:$45.00
04/13/09 B:$50.00
04/28/09 B:$55.00
60
50
40
30
Q3
Q1 2007
Q2
Q3
Q1 2008
Q2
Q3
Q1
Q2
20
2009
Created by BlueMatrix
Rating Definitions The ThinkEquity LLC rating system is based on a stock's expected total return over a 12-month investment horizon. Ratings on coverage are defined as follows: Buy: Appreciation potential of 20% or more over the next 12 months. Analyst has a high level of conviction that the company's business fundamentals are intact and that the company will meet or exceed earnings projections. Valuation is considered reasonable considering the company's potential. Accumulate: Appreciation potential greater than 0% and less than 20% over the next 12 months. Typically good companies, with fundamentals and earnings visibility intact, but current valuation limits upside potential. Source of Funds: Stock is expected to decline as much as 20% over the next 12 months, due to a single or combination of factors including excessive valuation, negative sector sentiment, and/ or reduced earnings expectations. Sell: Stock expected to decline 20% or more over the next 12 months. Company fundamentals are deteriorating, leading to material downward revisions in earnings projections and valuation. Distribution of Ratings, Firmwide
Page 3
August 10, 2009
Industry Report
ThinkEquity LLC IB Serv./Past 12 Mos. Rating
BUY [B] HOLD [Acc] SELL [S/SoF]
Count
Percent
Count
Percent
102 78 23
50.20 38.40 11.40
13 5 0
12.75 6.41 0.00
This report does not purport to be a complete statement of all material facts related to any company, industry, or security mentioned. The information provided, while not guaranteed as to accuracy or completeness, has been obtained from sources believed to be reliable. The opinions expressed reflect our judgment at this time and are subject to change without notice and may or may not be updated. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. This notice shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which said offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state. This research report was originally prepared and distributed to institutional clients of ThinkEquity LLC. Recipients who are not market professionals or institutional clients of ThinkEquity LLC should seek the advice of their personal financial advisors before making any investment decisions based on this report. Additional information on the securities referenced is available upon request. In the event that this is a compendium report (covers more than six ThinkEquity LLC-covered subject companies), ThinkEquity LLC may choose to provide specific disclosures for the subject companies by reference. For more information regarding these disclosures, please send a request to: Director of Research, ThinkEquity LLC, 600 Montgomery Street, San Francisco, California, 94111. Stocks mentioned in this report are not covered by ThinkEquity LLC unless otherwise mentioned. Member of the FINRA and SIPC. Copyright 2009 ThinkEquity LLC, A Panmure Gordon Company
Page 4
Related Documents
August 10, 2009
May 2020 6
10 August 2009
May 2020 5
Phc August 10 2009
May 2020 16
August 2009
June 2020 14
August 2009
May 2020 23