North Coast Solar Stocks

May 21, 2009

Canadian Solar Jumps; Canaccord, Oppenheimer Upgrade

Filed under: CSIQ — Tags: , , , , , , — Jason @ 1:44 pm

Posted by Eric Savitz
barrons.com

Canadian Solar (CSIQ) shares are sporting a fat gain today after a pair of analyst upgrades.

* Canaccord Adams analyst Jonathan Dorsheimer today upped his rating on the stock to Buy from Hold, with a new price target of – get this – $18, from $3.25. The stock yesterday closed at $9.30. While Dorsheimer says the company will report a “fairly difficult Q1″ next week, he says a weak quarter is already priced into the stock. He expects “very bullish tones” from the company on increasing volumes and a slowdown in ASP declines. “We expect that Canadian Solar, like its peers, will have begun to see better success in negotiating its silicon supply,” he writes, “which along with the increasing factory utilization should improve the company’s operating leverage.”
* Oppenheimer analyst Sam Dubinksy likewise today moved to an Outperform rating from Perform, with a $14 price target. Dubinsky writes that he is still bearish on the solar sector overall, but that he likes the CSIQ story, which he thinks is under-appreciated. Overall, he says, 2009 will be “a struggle” as the sector digests excess capacity. He writes that he is not convinced that second-half demand will live up to expectations, and that “2010 industry earnings power is questionable.” That said, he also writes that CSIQ is getting rid of an overhang by de-emphasizing its specialized UMG – that would upgraded metallurgical grade, if you must know – products and shifting toward more standard modules. “UMG has been an overhand as investors have questioned whether the product can gain traction in a declining poly pricing environment,” he writes. “UMG should now be viewed as a hedge if poly pricing rebounds.” He also says the company has a more healthy balance sheet than peers, with $136 million in cash and $157 million in debt.

CSIQ today is up 67 cents, or 7.2%, to $9.97.

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