North Coast Solar Stocks

December 7, 2009

Barclays Upgrades STP, SPWRA, JASO; Lifts 2010 Demand Forecast

Filed under: JASO, SPWR, STP — Tags: , , , , — Jason @ 9:51 am

By Eric Savitz
barrons.com

Barclays Capital analyst Vishal Shah this morning raised his 2010 demand forecast for the solar sector, increasing his rating on Suntech (STP), SunPower (SPWRA, SPWRB) and JA Solar (JASO), all to Overweight from Equal Weight.

Shah writes that he expects strong demand to continue into the first half of 2010, and expects companies to report improving trends in the near-term. “Although concerns about German subsidy cuts could remain a potential overhand on the sector … performance of solar stocks has recently lagged the broader market rally and as such expect continued positive sector momentum in the near-term,” he writes.

The Barclays analyst says demand in German, Italy, the U.S., China and Canada will drive positive fundamentals; he lifted his 2010 price forecast to $1.60/watt versus $1.50/watt previously. He upped his demand forecast for 2010 to 9.3 GW from 7.3 GW.

Shah thinks the demand environment in Germany will remain positive in the 2010 first half; he also expects a “rush to complete projects in the Italian market” ahead of changes in their feed-in-tariff program to drive strength in the second half. Shah adds that “gradual improvement in financing environment, further ASP declines, improvement in permitting constraints and positive impact of stimulus on U.S. [and] China demand could provide additional upside.”

Shah thinks Germany will cut subsidies by 5%-10%, but contends the resultant reduction in second half demand will be more than offset by additional demand in other major markets.

In today’s trading:

* STP is up 98 cents, or 6.4%, to $16.37.
* SPWRA is up $1.48, or 6.6%, to $23.79.
* JASO is up 33 cents, or 7.5%, to $4.73.

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