Auriga maintains a 'Hold' on Canadian Solar (CSIQ) Bragging Shipment, Dragging Profit
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Price: $14.50 -3.07%
Rating Summary:
12 Buy, 13 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 1
Rating Summary:
12 Buy, 13 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 1
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Auriga maintains a 'Hold' on Canadian Solar (NASDAQ: CSIQ) price target of $4.00.
Auriga analyst said, "Shipment Gain vs. Margin Drain; low Hurdle rate makes case for 2013 Profits . 4Q11 shipment growth of 22.8% solidified market share gains, and made Canadian Solar the only PV Company to deliver its original shipment guidance, but losses mounted as margins were sacrificed. A roughly 10% GM is breakeven for CSIQ. EPS profitability may make a cameo appearance exiting 2012, but we are not counting on it. Cost lag vs. ASP decline has long been its Achilles heel, but cost progress both external (polysilicon, wafer/cell sourcing) and internal (conversion costs) can make its flexible mfg. model profitable in 2013. The cost roadmap of $0.55/Wp-$0.60/Wp by end-2012/early-2013 is, we believe, pure fantasy. At $0.85/Wp-$0.90/Wp ASP by 4Q12 (vs. ~$1.02/Wp in 4Q11), its cost structure needs to track ~$0.80/Wp by 4Q12 (vs. $0.95/Wp in 4Q11) to breakeven, and it needs to get there first. Like other Chinese solar PV peer with high debt, Canadian Solar's B/S with 64.1% debt/capital is a drag on its earnings, but its less asset intensive manufacturing model does not need new debt to survive in the near-term. 2012 Shipment Guidance of 1.8GWp-2.0GWp vs. 1.32GWp is ambitious."
For an analyst ratings summary and ratings history on Canadian Solar click here. For more ratings news on Canadian Solar click here.
Shares of Canadian Solar closed at $2.85 yesterday.
Auriga analyst said, "Shipment Gain vs. Margin Drain; low Hurdle rate makes case for 2013 Profits . 4Q11 shipment growth of 22.8% solidified market share gains, and made Canadian Solar the only PV Company to deliver its original shipment guidance, but losses mounted as margins were sacrificed. A roughly 10% GM is breakeven for CSIQ. EPS profitability may make a cameo appearance exiting 2012, but we are not counting on it. Cost lag vs. ASP decline has long been its Achilles heel, but cost progress both external (polysilicon, wafer/cell sourcing) and internal (conversion costs) can make its flexible mfg. model profitable in 2013. The cost roadmap of $0.55/Wp-$0.60/Wp by end-2012/early-2013 is, we believe, pure fantasy. At $0.85/Wp-$0.90/Wp ASP by 4Q12 (vs. ~$1.02/Wp in 4Q11), its cost structure needs to track ~$0.80/Wp by 4Q12 (vs. $0.95/Wp in 4Q11) to breakeven, and it needs to get there first. Like other Chinese solar PV peer with high debt, Canadian Solar's B/S with 64.1% debt/capital is a drag on its earnings, but its less asset intensive manufacturing model does not need new debt to survive in the near-term. 2012 Shipment Guidance of 1.8GWp-2.0GWp vs. 1.32GWp is ambitious."
For an analyst ratings summary and ratings history on Canadian Solar click here. For more ratings news on Canadian Solar click here.
Shares of Canadian Solar closed at $2.85 yesterday.
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