Nomura Securities on Asia Solar Stocks: Waiting for Light at End of Tunnel - Strong Headwinds Amidst Bleak Macros
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Rating Summary:
13 Buy, 15 Hold, 3 Sell
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
13 Buy, 15 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Nomura Securities on Asia Solar Stocks: Waiting for the light at the end of the tunnel - Strong headwinds amidst bleak macros, high 2H11F inventories and weak 1H12F demand
Nomura analyst, Nitin Kumar, said, "Action: Wait for next phase of recovery in demand, likely in 2H12F The solar sector has de-rated sharply over the past two months. Valuations have unwound sharply as well, and we see strong investor interest in looking for a re-entry point. We have stress-tested our numbers, however, and do not see any respite. While valuations are near historical troughs, positive longer-term catalysts seem likely to take time and near-term catalysts are lacking so we are cautious on the sector outlook."
"Longer-term catalysts, for companies which can reposition themselves in for new realities, will come from: 1) Supply-side consolidation as higher cost producers are priced out of the market; and 2) demand elasticity given lower ASPs enabling stronger demand from new regions, especially US, China, Japan, and India; albeit needing improved financing availability."
Downgrades and price target/estimate changes include:
Canadian Solar (Nasdaq: CSIQ): maintains Neutral, slashes PT from $9.60 to $3.40. 2011E EPS from $1.89 to (52.33c), 2012E from $1.64 to (71.99c).
JA Solar (Nasdaq: JASO): maintains Neutral, slashes PT from $5 to $2. 2011E EPS from $1.00 to 19.26c, 2012E from 92.65c to (17.72c).
LDK Solar (NYSE: LDK): downgraded from Neutral to Reduce, slashes PT from $7 to $2.60. 2011E EPS from $1.74 to (6.79c), 2012E from $1.25 to (77.91c).
Suntech Power (NYSE: STP): downgraded from Buy to Neutral, slashes PT from $10 to $2.20. 2011E EPS from $1.05 to (78.17c), 2012E from $1.17 to ($1.03)
Trina Solar (NYSE: TSL): downgraded from Buy to Neutral, slashes PT from $25 to $7. 2011E EPS from $3.04 to $1.37, 2012E from $3.37 to (54.18c)
Yingli Green Energy (NYSE: YGE): downgraded from Buy to Neutral, slashes PT from $9 to $3.40. 2011E from $7.98 to $3.45, 2012E from $6.21 to ($5.61).
Nomura analyst, Nitin Kumar, said, "Action: Wait for next phase of recovery in demand, likely in 2H12F The solar sector has de-rated sharply over the past two months. Valuations have unwound sharply as well, and we see strong investor interest in looking for a re-entry point. We have stress-tested our numbers, however, and do not see any respite. While valuations are near historical troughs, positive longer-term catalysts seem likely to take time and near-term catalysts are lacking so we are cautious on the sector outlook."
"Longer-term catalysts, for companies which can reposition themselves in for new realities, will come from: 1) Supply-side consolidation as higher cost producers are priced out of the market; and 2) demand elasticity given lower ASPs enabling stronger demand from new regions, especially US, China, Japan, and India; albeit needing improved financing availability."
Downgrades and price target/estimate changes include:
Canadian Solar (Nasdaq: CSIQ): maintains Neutral, slashes PT from $9.60 to $3.40. 2011E EPS from $1.89 to (52.33c), 2012E from $1.64 to (71.99c).
JA Solar (Nasdaq: JASO): maintains Neutral, slashes PT from $5 to $2. 2011E EPS from $1.00 to 19.26c, 2012E from 92.65c to (17.72c).
LDK Solar (NYSE: LDK): downgraded from Neutral to Reduce, slashes PT from $7 to $2.60. 2011E EPS from $1.74 to (6.79c), 2012E from $1.25 to (77.91c).
Suntech Power (NYSE: STP): downgraded from Buy to Neutral, slashes PT from $10 to $2.20. 2011E EPS from $1.05 to (78.17c), 2012E from $1.17 to ($1.03)
Trina Solar (NYSE: TSL): downgraded from Buy to Neutral, slashes PT from $25 to $7. 2011E EPS from $3.04 to $1.37, 2012E from $3.37 to (54.18c)
Yingli Green Energy (NYSE: YGE): downgraded from Buy to Neutral, slashes PT from $9 to $3.40. 2011E from $7.98 to $3.45, 2012E from $6.21 to ($5.61).
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