Deutsche Bank (DB) downgraded its rating on Amyris Inc. (NASDAQ:AMRS) to "Hold" from "Buy" and price target to $9 from $20, given the company's reduced visibility into production volumes and timing of profitability.
Vishal Shah, an analyst at DB, said he is taking a wait-and-see approach to the company's ability to execute on yet to be defined milestones.
Amyris, a developer of renewable compounds, held a business update call where management removed 2012 guidance, pushed out construction plans and announced a capital raise. The company will report earnings on February 27.
"While the company maintained it is not a technology issue, the push out of SMA plant and selection of Paraiso plant shows that scaling is a major issue....while we believe management will be ultimately able to solve the problems of complex fermentation, until clarity on production volumes is given (especially with regards to 2013 in Paraiso and SMA), we expect shares to be range bound," Shah wrote in a note.
Shah said while the company has some heavy lifting to do in terms of technology development in increasing yields to target 27%, he believes it has the correct platform and partners to achieve this goal.
On Friday, the stock tanked 28.8% to $6.92. The shares have been trading between $6.85 and $33.85 over the past year.