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Canadian Solar Inc. (NASDAQ: CSIQ) is scheduled to announce its second quarter financial results next Tuesday. In a report issued Friday, JPMorgan analysts Paul Coster, Mark Strouse and Paul J Chung provide a preview of the results.
According to the note, they expect upbeat comments regarding end-market demand in each main region, similar to what happened with other Tier-1 solar DevCos, which have already reported their quarterly results.
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Having said this, however, they warn that the company’s GAAP results could be muddled, mainly due to YieldCo project holdbacks. “Given the volatility in the YieldCo space, with average dividend yields ~200bps higher than they were two months ago,” the analysts expect management to comment on the potential YieldCo, and if it would be value accretive at current yields.
The experts assure that, if Canadian Solar chooses to pass on the YieldCo vehicle, returning to its historical build-to-sell model instead, the company can deliver in EPS of roughly $4.00-$5.00 in 2015 and 2016. This means that its stock would be trading at a mid-single-digit P/E multiple. So, with or without a YieldCo, valuation looks attractive.
Consequently, the firm maintains an Overweight rating and $39.00 price target on shares of Canadian Solar.
Previewing Q2
The analysts at JPMorgan expect the company to deliver second quarter EPS of $0.14 on revenue $597 million, versus the Street’s consensus of $0.13 and $596 million.
The firm is anticipating modules revenue of $441 million and solutions revenue of $156 million, and gross margins of 14.7 percent, in line with guidance of 13 percent-15 percent.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.