Yingli Green Energy Shares Dropped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese solar products manufacturer Yingli Green Energy (NYS: YGE) have skidded 10% today thanks to an analyst rating cut and bad news out of Germany.

So what:Deutsche Bank analyst Vishal Shah says that Germany may cut feed-in tariff rates by 15% in April and include a 2% cut every month to go along with an installation cap. There are other rumors about what cuts will look like, but the common thing is they don't look good.

Analysts at Auriga Securities cut Yingli to hold from buy and put a $5 price target on the stock.

Now what: A hot 2012 for solar stocks came to a screeching halt on today's news. This could change the demand dynamic in Germany, but solar stocks have risen this year mostly on positive reports out of China and India. This is by no means good news for Yingli, but I wouldn't panic just yet, because I still think there will be strong demand for solar in 2012 and beyond.

Interested in more info on Yingli Green Energy? Add it to your watchlist byclicking here.

At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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