Deutsche Bank solar analyst Steve O’Rourke is warning clients to watch out for weak Q2 results in the solar industry.
Module shipments and installations are up, but not in line with what many people are expecting. The continued drop in module prices, as well as limited availability to credit are going to weigh on solar earnings. O’Rourke sees write downs in inventory and receivables.
The second half of the year will be better, but not be good enough to match guidance provided by most solar companies. So, watch out for lowered guidance numbers. Also, he warns that margins and profits will be squeezed.
On a company by company basis:
SunPower (SPWRA): There is a risk the company will lower guidance once again. The company’s premium pricing is under pressure, but overall O’Rourke likes this company. He says it has a strong operational record and is likely to benefit greatly from the stimulus. Further, it’s got a good business selling premium panels. O’Rourke says the company can command a premium to its rivals. He has a $24 price target on the company.
First Solar (FSLR): O’Rourke loves them, saying they’ve managed the shake out better than anyone else. No changes in guidance expected, just look out for cautionary comments on the market. The near term demand might weaken. He’s got a $170 price tag on the stock.
Energy Conversion Devices (ENER): A very negative outlook. Big concerns on the margins, as plummeting prices will hit them hard. A $20 price target
Canadian Solar (CSIQ): The company already lowered its guidance once. O’Rourke thinks the stock is worth $9, and sees the company posting a loss for the year. Lower module prices are troubling as is demand.
Evergreen Solar (ESLR): A $4 price target and doubts about whether it can hit profitability. Ouch.
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