Trina Solar Should Rise on Bullish Note

Cowen is out positive on Trina Solar (NYSE:TSL) this morning, raising their Street high 2008 estimates to to reflect the new GCL supply deal, which boosts secured silicon to 95% of targeted production. We believe Street consensus is too low on operating margin, and too high on interest expense (poly plant interest should be capitalized). Silicon coverage for 2009 also looks good, with perhaps 15% still to come from new sources.

Raising 2008E E/ADS To $4.05 Vs. Prior $3.64, Street $2.90. They raised revenue to $750MM (vs. prior $710MM, St. $709MM), based on shipments of 195MW (in line with 95% coverage of 200-210MW target). Since 15% of poly is covered by the new contract, they boosted GM by 50 b.p., to 23.8% (vs. St. 23.1%).

Sees 50%+ upside vs. the market in 12 months and reiterates Outperform.

Notablecalls: Cowen's one of the best firms covering the Solar space. I suspect TSL will trade up today. I see a possible squeeze developing.

Comments

[CliffA42:]

One of the most undervalued stocks on the market, and among the solar players, distinctly so. Yes, I own it, bought around 30, and looking for 45-50.

2008 Apr 11 12:48 PM

[larsson:]

Trina is trading on 6-7 P/E 2008. Why would you sell on 50 ?

End of year, Trina will have EPS - 4 or 5 times P/E 40-50.

So TSL has a target price of above 150 us$ 2008

2008 Apr 12 05:52 AM

[larsson:]

Furthermore, Trina can beat 4 EPS very simple, as they can use more scrap than virgin polysilcion, they guided very low regarding their 210 MW 2008, while "real capacity ramp up" will reach 250 - 280 MW.

This stock is one of the most fantastic stroies in the sector.

With the actual much too low street estimation of EPS, Trina can become the No. 1 Momentum Player in the sector, as it will be easy to beat the street every single Q big time.

2008 Apr 12 05:56 AM

[johneeeeee:]

if you guys want a real value stock by (drys)dryships its a 65 dollar stock making over 18 dollars a share with a dividend to boot. drys should be trading around 200 dollars a share. i wouldnt buy this piece of shit solar company.

2008 Apr 12 04:37 PM