Analysts Weigh in on Canadian Solar Inc. (CSIQ) and Maxwell Technologies Inc. (MXWL) Following Pre-Announcement and Earnings

By Shira Gonen

Analysts from FBR & Co. and Canaccord weighed in earlier this week on Canadian Solar Inc. CSIQ and Maxwell Technologies Inc. MXWL following an earnings pre-announcement and Q4 earnings, respectively. While one is bullish on Canadian Solar, stating growth in key metrics, the other remains neutral on Maxwell, citing higher than expected revenues along with Chinese market risks.

Canadian Solar Inc.

Analyst Carter Driscoll of FBR & Co. weighed in on Canadian Solar earlier this week following its 4Q15 earnings pre-announcement. The company expects to post total revenue between $1.02 billion and $1.07 billion, higher than the previous estimate range of $930 million to $980 million. The company also raised its total solar module shipment range up to 1,350 MW-1,400 MW, versus prior expectations of 1,300 MW to 1,350 MW. CSIQ also increased its 2016 guidance for the second time in 3 months to reflect increased module shipments and revenue. Now, the company expects 2016 revenue between $3.35 billion to $3.40 billion, up from the last estimate of $3.28 billion to $3.33 billion.

On February 16, 2016, the analyst maintained his Outperform rating on the stock with a $32 price target. He explains, "Canadian Solar preannounced positive 4Q15 results for all key financial metrics. The company also raised 2016 guidance, which reaffirms our view that Canadian Solar commands a market-leading module position diversified by geography and a growing grid-scale solar development platform. We would expect the stock to react positively on the solid 4Q15 beat and the increased 2016 guidance."

Carter Driscoll has a 20% success rate recommending stocks with an average loss of (21.6%) per recommendation on TipRanks. Out of the 4 analysts who rated the company in the past 3 months on TipRanks, all gave a Buy rating. The average 12-month price target for the stock is $33.25, marking a 73% success rate from where shares last closed.

Maxwell Technologies Inc.

Canaccord analyst Jonathan Dorsheimer weighed in this week on Maxwell after the company reported its Q4 earnings. The company posted higher than expected revenue of $49.8 million compared to the analyst's estimate of $47.7 million. However, the company posted slightly lower than expected earnings per share of $0.02, compared to Dorsheimer's estimate of $0.03.

The company manufactures ultracapacitators, a component that holds electric charge quantity. According to Dorsheimer, better than expected revenues represent ultra capacitor growth. He also highlights "design wins" as a factor for the technology to expand. Although the analyst is confident about this type of technology and its "long-term potential," he notes "increased competition and nascency may be impacting near-term market adoption issues and fueling further lumpiness." However, he credits management's "prudent" financial decisions as a key factor which supports "the bridge toward technical maturity."

The analyst also comments on the auto market, believing it represents "scale and visibility" for UC technology. Dorsheimer credits a "weakening China Bus market" for future uncertainties for the company, especially due to weak Q1:16 guidance. He explains, "Risks around the China Bus market continue and a weak Q1/16 guide with limited visibility has been (and will likely continue to be) an overhang on the stock." While he believes this risk will eventually pass, "the recent subsidy change in China will hurt the business" near-term.

On February 16, 2016, the analyst reiterated a Hold rating on the stock and decreased his price target on the stock from $6.00 to $5.50. Jonathan Dorsheimer has a 38% success rate recommending stocks with an average loss of (6.1%) per recommendation on TipRanks.