Cleantech & Renewable Energy

[snowcloud]

Solar Targets Slashed as Demand Seen Dropping by 25%

http://seekingalpha.com/article/126419-solar-targets-slashed-as-demand-seen-dropping-by-25?source=email

Barclays Capital analyst Vishal Shah Tuesday morning cut his ratings on both First Solar (FSLR) and SunPower (SPWRA) to Equal Weight from Overweight, citing continued concerns that tight credit markets may hurt solar sector demand in Q2 and Q3. “With over 1 GW of inventory in the channel, any demand recovery is unlikely to result in overall industry shipments growth until Q4,” he writes.

Shah now sees global photovoltaic shipments of 3.8 GW in 2009, down 25% from 2008, and below his previous forecast for a flat year. He expects the German market to be flat.

For SunPower, Shah slashed his price target to $18, from $35. His 2009 EPS estimate falls to $1.45 a share, from $2.30; for 2010, he sees profits of $2 a share.

For First Solar, his price target drops to $110, from $140; he trimmed his 2009 EPS estimate to $5.10, from $6, while maintaining his 2010 estimate of $8 a share.

Shah says his new downbeat view of the sector follows recent checks and negative datapoints from Monday’s earnings news from Energy Converson Devices (ENER). Also adding to the grim environment for the solar stocks Tuesday morning: disappointing results from Canadian Solar (CSIQ).

Put it altogether, and you get a recipe for a big sell-off in solar shares. In Tuesday’s trading:

First Solar is down $12.06, or 9.7%, to $112.80.
SunPower is down $2.87, or 12.3%, to $20.44.
Energy Conversion Devices is down $4.66, or 25.3%, to $13.77.
Canadian Solar is down 48 cents, or 12.2%, to $3.40.