North Coast Solar Stocks

June 30, 2009

Trina, Yingli Seen Taking Shr From U.S., EU Solar Players

Filed under: TSL, YGE — Tags: , , , — Jason @ 10:36 am

Posted by Eric Savitz

Both Trina Solar (TSL) and Yingli Green Energy (YGE) shares are trading higher today following upgrades by Morgan Stanley analyst Sunil Gupta. He thinks both companies are going to take market share in the solar sector from U.S.-based and European rivals. Here are the details:

* Trina: Rating to Overweight from Underweight. Target to $37 from $7.30. (Wow, that’s quite a change of heart there.) The reasons for the more bullish stance: an expected industry inflection next year, Trina’s position as a low-cost producer, “and hence its potential to gain market share at the expense of high cost EU and U.S. producers.” He sees TSL driven by “high volume growth, low-to-moderate margins and relatively good working capital management.”
* Yingli: Rating to Equal Weight from Underweight, Target to $16.30 from $3.10. (Wow, again.) Gupta writes that is new stance on the stock is based on “easier domestic credit and capital market conditions, which have eliminated financial survival risk, opening up of the domestic China market and prospects of a gain in global market share.” He thinks Yingli, like Trina, will take share from the U.S. and European players due to cost advantages. That said, he thinks the stock’s valuation is “reasonable, but not compelling.”

TSL today is up $1.42, or 5.9%, to $25.41. YGE is up 27 cents, or 2.1%, to $13.43.

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