Market Overview

Gordon Johnson Says Solar PV Fundamentals Are Deteriorating

Share:
Gordon Johnson Says Solar PV Fundamentals Are Deteriorating
Related
Axiom's Gordon Johnson On Why PV Installations In The U.S. Could Be Cooling
13F Season: David Einhorn's New Positions
Related JASO
18 Biggest Mid-Day Gainers For Thursday
Mid-Day Market Update: U.S. Stocks Turn Negative; GoPro Shares Spike Higher
  • Shares of most Solar companies plunged over the past one month.
  • Axiom Capital’s Gordon L. Johnson has a Market Underweight rating for the Alternative Energy sector.
  • Falling pricing, increasing capacity and declining demand translate to a further deterioration in PV fundamentals, Johnson stated.

Through the current week, average prices for poly, wafers, cells and modules were largely flat w/w across the value chain, analyst Gordon Johnson said.

He further commented that C4Q15 earnings in the sector are unlikely to be a positive catalyst, with Wacker attributing earnings weakness to lower polysilicon prices, poly-Si spot prices down or flat for the last 29 consecutive weeks, module prices down or flat for the last 12 straight weeks, wafer prices remaining flat for the last couple of weeks and cell prices remaining flat for the past 4 weeks.

Johnson added that checks earlier this week suggested “module vendor margins are collapsing due to higher input costs in the form of PV wafers/cells and an inability to pass these higher costs onto customers.”

Referring to the PV fundamentals, the analyst mentioned that they seem to be deteriorating further, especially given:

  1. End-market demand in China, Japan and the US taken together, which represented 71 percent of global demand in 2015, is “almost sure to slow” in 2016.
  2. The backdrop of ever-increasing capacity expansions.

Ratings

  • Sunedison Inc (NYSE: SUNE) - Hold
  • JA Solar Holdings Co., Ltd. (ADR) (NASDAQ: JASO) - Sell
  • Trina Solar Limited (ADR) (NYSE: TSL) - Sell
  • Yingli Green Energy Holding Co Ltd (ADR) (NYSE: YGE) - Sell
  • SolarCity Corp (NASDAQ: SCTY) - Sell

Latest Ratings for SUNE

DateFirmActionFromTo
Mar 2016Stifel NicolausTerminatesHold
Mar 2016Axiom CapitalMaintainsSell
Mar 2016Avondale PartnersDowngradesMarket OutperformMarket Perform

View More Analyst Ratings for SUNE
View the Latest Analyst Ratings

Posted-In: axiom capital Gordon L. JohnsonAnalyst Color Short Ideas Reiteration Analyst Ratings Trading Ideas Best of Benzinga

 

Related Articles (JASO + SCTY)

View Comments and Join the Discussion!