Axiom Capital Downgrades Solar Stocks to Sell Amid Trump Presidency
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(Updated - November 16, 2016 7:20 AM EST)
Axiom Capital Gordon Johnson downgrades to the Solar Sector to Market Underweight from Market Overweight stocks in the sector to Sell from Hold.
Johnson cited: The unexpected Donald Trump election and negative impact it will have on U.S. market and other, China's Top Runner and net income dilutive bids by China solar companies, collusion by a number of Chinese polysilicon vendors providing downside to prices.
On Trump, Johnson believes less than favorable renewable energy policies from his administration may tip the scale on the risk/reward balance. Specifically, they now portend that: (a) US PV installation growth will peak in ‘16/’17, as solar incentives take a back seat to cheaper coal/gas production, & – more acutely – (b) a decline in growth in US solar installations, & exit from the Paris Climate Accord (link), would, among other effects, likely lead to contagion – to wit, as the 2nd largest emitter of greenhouse gases, if the US gov’t backs out of committing funds to action on climate change, other less economically prosperous nations would likely follow suit by cutting their own support for solar incentives.
The analyst also notes that with the maintenance taken by a number of polysilicon vendors in October ending in November, they see price pressure on tap near term.
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Related EntitiesDonald J. Trump, Gordon Johnson
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