Roth Capital Cuts PT on ReneSola (SOL) to 65c Amid Q3 Miss, Weak Outlook

November 30, 2016 8:09 AM EST
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Price: $0.65 -1.52%

Rating Summary:
    3 Buy, 5 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 6 | Down: 10 | New: 6
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Roth Capital cuts its price target on Sell-rated ReneSola (NYSE: SOL) from $1 down to 65 cents following Q3 results and outlook issued earlier in the week.

The firm offered the following overall thoughts: With lower expected margins for SOL's manufacturing businesses, we believe the company's profitability ahead has become more dependent on its strategic shift to the downstream development and distribution businesses. SOL appears to be making progress in this transition with 24MW of projects recognized in revenue in Q3, 26MW of sales expected in Q4, and 130MW planned for completion by Q1'17. Given the progress made, we are increasing our forecasted 2017 project sales to 200MW from 170MW. Notably, 2017 project sales could exceed our forecast given SOL's 448MW of shovel ready projects and management's plans to build 130-140MW per quarter. We are maintaining a more conservative forecast due to the potential difficulty in aggressively scaling up the downstream business from an estimated ~60MW of projects sales in 2016.

Overall, we are lowering 2017 estimates on lower ASPs and margins for the wafer and module businesses and maintain our Sell rating as the company's debt burden could challenge earnings ahead.

For an analyst ratings summary and ratings history on ReneSola Ltd. click here. For more ratings news on ReneSola Ltd. click here.

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