Barclays on U.S. Clean Technology & Renewables: Recent 3Q Results Highlight Ongoing Industry Challenges
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Rating Summary:
5 Buy, 5 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays on U.S. Clean Technology & Renewables: Recent 3Q Results Highlight Ongoing Industry Challenges
Barclays analyst, Amir Rozwadowski, says, "Recent Results Highlight Continued Market Challenges: Recent results across the solar food chain, including JA Solar (Nasdaq: JASO), JinkoSolar (NYSE: JKS), LDK Solar (NYSE: LDK), ReneSola (NYSE: SOL), Suntech Power (NYSE: STP), Trina Solar (NYSE: TSL), and Yingle (NYSE: YGE) highlight expectations for industry challenges to remain for at least the near term. Broadly driven by now familiar themes of overcapacity and limited visibility on the trajectory of end market demand, most vendors across the food chain unsurprisingly reduced guidance."
"Visibility on Demand Inflection Remains Limited: Across the board, while companies were optimistic about longer-term growth prospects for the solar industry, management teams acknowledged that the industry continues to face multiple near-term headwinds. Thus most management teams are looking for means to stabilize balance sheets, reduce working capital, lower capex and prioritize certain investments (e.g. higher efficiency cells, U.S. and Chinese operations, etc.) in order to survive an expected period of consolidation.
We Continue to View the Solar Market with Caution Given Overcapacity: In line with our recent initiation of coverage on the U.S. Clean Technology and Renewables sector, we believe recent results support our relatively cautious view on the solar industry compared with other areas of clean technology. We thus continue to focus on areas we believe are less dependent on waning government initiatives and supported by a compelling cost/value proposition (e.g. EVs, energy efficiency) vs. those that face overcapacity/limited demand visibility (e.g. LEDs, solar)."
Barclays analyst, Amir Rozwadowski, says, "Recent Results Highlight Continued Market Challenges: Recent results across the solar food chain, including JA Solar (Nasdaq: JASO), JinkoSolar (NYSE: JKS), LDK Solar (NYSE: LDK), ReneSola (NYSE: SOL), Suntech Power (NYSE: STP), Trina Solar (NYSE: TSL), and Yingle (NYSE: YGE) highlight expectations for industry challenges to remain for at least the near term. Broadly driven by now familiar themes of overcapacity and limited visibility on the trajectory of end market demand, most vendors across the food chain unsurprisingly reduced guidance."
"Visibility on Demand Inflection Remains Limited: Across the board, while companies were optimistic about longer-term growth prospects for the solar industry, management teams acknowledged that the industry continues to face multiple near-term headwinds. Thus most management teams are looking for means to stabilize balance sheets, reduce working capital, lower capex and prioritize certain investments (e.g. higher efficiency cells, U.S. and Chinese operations, etc.) in order to survive an expected period of consolidation.
We Continue to View the Solar Market with Caution Given Overcapacity: In line with our recent initiation of coverage on the U.S. Clean Technology and Renewables sector, we believe recent results support our relatively cautious view on the solar industry compared with other areas of clean technology. We thus continue to focus on areas we believe are less dependent on waning government initiatives and supported by a compelling cost/value proposition (e.g. EVs, energy efficiency) vs. those that face overcapacity/limited demand visibility (e.g. LEDs, solar)."
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