Cowen Trims PT on Trina Solar (TSL) to $18; Comments on Q2, Outlook

Cowen and Company maintains an Outperform rating on Trina Solar (NYSE: TSL), but trims its target price from $21 down to $18 following Q2 results and guidance.

Analyst Jeffrey Osborne commented, Strong demand for modules and projects in China gives plenty of opportunities for growth going into the 2H of 2014. Management acknowledged capacity limitation by the end of 4Q14, which limits upside potential in the short-term, in our opinion. Guidance was below expectations due to holding projects, but we see leverage playing out in 15/16. Low tariffs should allow US share gains.

Observations: TSL reported revenue of $519.4mn versus our estimate of $515mn. Gross margin came in at 15.4% compared to our estimated 15.3%, down from 20.6% reported in the prior quarter, due to an adverse geographic project mix and retained projects. E/ADS was $0.14, compared to our estimated $0.06 and in line with street estimate of $0.14.

Robust levels of global demand should continue to drive notable revenue growth in 2H14 through 2015. New utility project are coming online with construction commencing on a new 90 MW and 120 MW projects in China. Beyond China projects which will be retained, TSL is building several UK-based projects which will be sold. We see module momentum in the U.S. despite tariffs, Japan and China serving as tailwinds in 2H14.

For an analyst ratings summary and ratings history on Trina Solar click here. For more ratings news on Trina Solar click here.

Trina Solar closed at $12.30 yesterday.

You May Also Be Interested In

• Pentair (PNR) PT Raised to $85 at TD Cowen
• General Motors (GM) PT Raised to $60 at JPMorgan
• PulteGroup (PHM) PT Raised to $143 at Oppenheimer