North Coast Solar Stocks

September 17, 2009

Solar: Analyst Sees Signs Of Demand Recovery

Filed under: CSIQ, STP, TSL, YGE — Tags: , , , , , — Jason @ 12:58 pm

By Eric Savitz
barrons.com

The clouds may be clearing for the solar sector.

Collins Stewart analyst Dan Ries writes this morning that “for the first time in nearly a year, channel checks point to a demand recovery in the solar market.” He says the recovery has been clear in Germany, the world’s largest solar market, accounting for an expected 36% of the global market in 2009. Ries adds that there has been improvement, as well, in Italy, France and the U.S. And he says that the new government in Japan is likely to “sharply increase” subsidies in that country starting in November.

According to Ries, “demand is exceeding expectations in Q3, a situation that should carry into Q4.”; He says multiple channel checks indicate that demand has been strong enough to create stock-out conditions for modules from multiple vendors in Germany, including those from Yingli Green Energy (YGE), Suntech (STP) and Trina Solar (TSL). Ries writes that there are “obvious positive implications” for the stocks from data suggesting demand has improved and is exceeding expectations set as recently as mid-August. He thinks module vendors will likely report strong Q3 results, with many topping guidance and Street estimates.

Ries is feeling especially upbeat about Canadian Solar (CSIQ), and today raised his rating on the stock to Buy from Hold, setting a price target of $21. He writes that the combination of a strengthening of demand, cost reduction moves and a relatively low valuation “gives us great comfort that CSIQ can outperform the market in the quarters ahead.”

In today’s trading:

* Yingli is up 7 cents, or 0.5%, to $13.95.
* Trina is off 21 cents, or 0.7%, to $31.26.
* Suntech is up 14 cents, or 0.8%, to $17.49.
* Canadian Solar is down 61 cents, or 3.5%, to $16.65.

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