Canadian Solar (CSIQ) Better-Positioned vs. Peers Amid Expected Solar Glut - Roth Capital
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Roth Capital offered-up commentary on Canadian Solar (Nasdaq: CSIQ) today ahead of the company's Q2 report on August 18th. The firm rates CSIQ at Buy with a price target of $20.
Analyst Philip Shen thinks Canadian Solar is better-positioned versus peers amid expected overcapacity in the solar industry. The analyst commented,
While CSIQ may not have the lowest module cost structure, we believe the company has the unique ability to drive greater earnings power vs. peers as the company has a strong project backlog that could be monetized. We estimate CSIQ could have ~1.3GW of projects on B/S at YE'16 comprising 438MW of operating assets as of Q1'16 and ~1GW expected to be constructed in 2016 less our estimated 2016 project sales of 185MW. We believe CSIQ’s operational portfolio expected at YE’16 could generate ~$7/share of EPS if the projects were sold. We expect CSIQ to selectively sell operational assets, and it is uncertain how many projects will be sold in H2’16 and 2017.
[W]e expect Q2 results to be strong ahead and have touched up estimates. As for the stock, although we would not be surprised to see additional weakness near-term on overall negative sector sentiment, we would look to opportunistically pick up shares on the weakness, the analyst noted.
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