UBS analysts Robin Cheng and Stephen Chin this morning assert in a lengthy report that solar energy demand is gradually recovering, and that momentum should accelerate in the second half of this year, driven by strong government incentives in China and the U.S., improved project financing in the U.S and lower module prices. He raised his forecast for 2010 solar demand by 15% to 10.5 GW from 9.1 GW, although he lowered his estimate on module prices for 2010 by 12% to $1.95 per watt.
His colleague Chin today boosted his rating on SunPower (SPWRA) to Buy from Neutral, upping his target to $38, from $26. He says SPWRA is the best positioned U.S. solar company. “Our checks find that the U.S. Treasury is likely to start accepting applications by the end of June” for stimulus program subsidies, “with cash grants likely paid within 65 days of the application date,” he writes. Chin reports that channel checks support his view that the U.S. residential solar segment will likely grow 2x in 2010 to 340 MW given lower module prices, an uncapped 30% investment tax credit, and generous state level subsidies, enabling residential system buyers to lower payback periods to under five years from 9 years previously.
Chin ups his 2009 EPS estimate for SPWRA to 42 cents from 32 cents; for 2010 he goes to $2.25, from $1.98.
SPWRA this morning is up $1.43, or 5.1%, to $29.50.
Despite the downgrade, LDK is up 49 cents, or 4.5%, to $11.48. |
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