Mizuho double downgrades Canadian Solar as storage gains priced in

Investing.com -- Mizuho double downgraded Canadian Solar to Underperform, saying the stock’s sharp rally has already baked in the expected growth in its storage business while uncertainty over US compliance rules limits further upside.

The firm said Canadian Solar shares have jumped 81% in the past month and 108% in the past three months, far ahead of both solar and storage peers.

Analysts said the move reflects investor bets on stronger battery storage demand and a bottoming in solar valuations, but argued the surge looks excessive given that the company’s solar shipments are expected to be flat in 2026 and storage growth is already well understood.

Mizuho said management’s outlook points to nearly double the storage shipments next year, and recent quarterly results were helped by higher storage volumes. With those expectations now visible, the bank sees little reason to assign a higher growth valuation to its 2026 earnings.

The analysts also flagged uncertainty around US factory compliance with foreign-entity rules. Canadian Solar aims to meet requirements by the end of 2025, likely by reducing ownership in its CSI Solar unit.

Mizuho said the final guidance poses binary risks because any ownership or intellectual property transfer could require Chinese government approval. The bank values the US factory contribution at about $2 a share in its base case.

Mizuho raised its price target by 40% to $21 after peer multiple expansion, but said unresolved US compliance, oversupply risks and limited catalysts in the core business justify the downgrade despite the higher target.

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