UPDATE: Axiom Turns Bullish on Solar and Raises Yingli (YGE), Trina (TSL), and JA Solar ( JASO) to Buy (SCTY)

October 6, 2016 7:11 AM EDT
Get Alerts YGE Hot Sheet
Price: $1.43 --0%

Rating Summary:
    2 Buy, 11 Hold, 5 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 9 | Down: 10 | New: 33
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(Updated - October 6, 2016 9:12 AM EDT)

Axiom Capital upgraded Yingli Green Energy (NYSE: YGE), Trina Solar (NYSE: TSL), and JA Solar Holdings (NASDAQ: JASO) from Sell to Buy. Price targets were raised to $5.40, $15, and $10, respectively. SolarCity (NASDAQ: SCTY) was raised to Hold.

Analyst Gordon L. Johnson II highlighted catalysts from China demand, revitalized investor interest, the U.S. election, and valuation.

Johnson explained, "The impetus for our new-found solar optimism rests with 4 key themes, including: (1) China’s proposed Jul. 1, 2017 FiT cut, which we estimate will usher in ~25GW of 1H17 Chinese “pull-in” demand (the 6.8% China FiT cut Jul. 1, 2016 caused ~20GW of demand pull-in – link), suggesting, when including ~34GW of ROW demand, 70.5GW of modules produced in ’17, & ~5.7GW of excess inventory, the solar mkt, temporarily (i.e., in 1H17), will be defined by undersupply (pushing prices across all solar substrates higher), (2) after seeing 32/18 straight weeks of week-overweek (“w/w”) multi-wafer/multi-cell price declines, respectively, where just two weeks ago wafer prices fell 4.7% w/w (or 91.8% annualized), prices for both of these substrates moved higher this week – on the heels of news of a much sharper than expected ’17 FiT cut planned in China (link) – implying the “fruits” of demand pull-in have already begun to bloom in the far east (& also signifying solar prices have bottomed)."

The analsyt continued, "(3) the fact that 2013-2015, over the Dec.-Mar. timeframe, the Solar TAN Index has avg.’d a 19.9% return, due, we blv, to a nonfundamental sentiment tailwind sparking clean energy investors’ “animal spirits” – pushing clean energy funds to “refocus” on solar stocks – which we blv a poss. H. Clinton Presidential election win would serve as this yr given her robust 140GW solar installation goal (link), even if unachievable, & (4) the fact that the Solar TAN Index has materially underperformed the mkt this yr, falling 32.5% YTD vs. +5.7% for the S&P 500. In short we see catalysts of both the fundamental & sentiment variety on the horizon, implying the time to BUY is now."

For an analyst ratings summary and ratings history on Yingli Green Energy click here. For more ratings news on Yingli Green Energy click here.

Shares of Yingli Green Energy closed at $3.89 yesterday.

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