Thu, Jan. 15, 2:56 PM
- Yesterday's oil rally has proven short-lived: WTI crude is down $1.90 today to $46.58. With equities going in the same direction, solar stocks (TAN -3%) are having another rough day.
- SolarCity (SCTY -3.9%) and SunEdison (SUNE -6.9%) are also contending with target cuts from Canaccord's Josh Baribeau (to $64 and $26, respectively), who nonetheless maintains Buy ratings. "We are choosing to get slightly less aggressive on the riskier high-multiple names in the solar group as a result of growing macro uncertainty and business model changes in 2015."
- However, Baribeau "[remains] confident in SolarCity's momentum," and expects the company to generate "significant value" from its contracted assets in time. Q4 supply chain talks indicate U.S. residential solar demand remains "very strong."
- Regarding SunEdison, he's worried the company is "taking on a greater amount of execution and capital risk following announcements of potential manufacturing capacity and international joint ventures." But he still considers it "the world's leading renewable project developer, with a track record of executing."
- Fellow U.S. solar firms SunPower (SPWR -7%) and Vivint Solar (VSLR -7.6%) are also off sharply. Other industry names are seeing more modest declines, but still generally underperforming the Nasdaq.
Fri, Jan. 9, 2:37 PM
- Chief Investment Strategist Michael Hartnett makes the case for European energy stocks, U.S. banks relative to Canadian ones, and solar.
- "Unloved European energy is trading at record valuation lows vs. U.S. energy," says Hartnett, noting a 5.5% yield provides a lot of protection against dividend cuts. U.S.-listed ETFs, however, don't include anything dedicated to European plays, so there's the Paris-listed SPDR MSCI Europe Energy UCITS ETF, which has Shell (RDS.A, RDS.B) and Total (NYSE:TOT) among its top holdings.
- It's no surprise Canada is far more exposed to energy than the U.S., and Hartnett notes more than 40 rigs have recently been taken offline, oil sands production is winding down, and the bubbly Canadian housing market is creaking (Canadian property REITs are off 20% in the last two months). Going long the KBWR or KRE vs. a short in the Toronto-listed Capped Financial Index could be a way to play.
- Solar has been punished alongside oil prices, says Hartnett, but competes with gas rather than oil. "The secular trend toward greater solar energy generation remains intact." ETFs: TAN, KWT
Thu, Jan. 8, 1:15 PM
- Deutsche's Vishal Shah, bullish on solar for a long time, asserts the "recent volatility in solar stocks, driven largely by oil price weakness, presents an attractive entry point for investors as we expect 2015 to be a year of stable industry pricing and accelerating volume growth."
- Shah expects solar to see a "balanced supply/demand outlook as strong demand from the US and improving demand from China/other emerging solar markets offsets any potential demand weakness in the UK/Japan."
- He observes oil accounts for just ~5% of global electricity output, and sees both solar project pipelines/margins and module margins rising in 2015. Tariffs against Chinese module vendors are expected to be "completely removed."
- His top picks are SolarCity (SCTY +3.3%), SunEdison (SUNE +4.1%), SunPower (SPWR +6.1%), and Vivint (VSLR +0.3%); the first three are faring quite well today. Yingli (YGE +0.2%), however, has been downgraded to Hold due to balance sheet and financial flexibility concerns.
- Other major gainers: FSLR +3.9%. JKS +6%. ENPH +5.4%. CSIQ +3.7%. RGSE +5.2%. TERP +3.2%.
- SunEdison announced today it has bought new wind turbines that will allow it to build up to 1.6GW of wind projects that qualify for U.S. tax credits. The purchase follows the company's $2.4B deal to buy project developer First Wind.
- ETFs: TAN, KWT
Tue, Jan. 6, 2:47 PM
- The broad Monday selloff in solar names that accompanied WTI crude's plunge towards $50/barrel has been followed by major Tuesday losses (TAN -2%) as WTI falls by another $2.34 to $47.70/barrel.
- Brent crude is down by $2.44 to $50.67/barrel, and Henry Hub natural gas is up by $0.03 to $2.91/mmBtu (still down sharply over the last few months). The Nasdaq is down 1%.
- 3%+ decliners: SUNE -5.9%. SPWR -4.3%. JKS -5.8%. DQ -9.4%. VSLR -4.6%. YGE -4.4%. HSOL -4.5%. ENPH -7.6%. CSUN -8.8%. TSL -3.4%. ASTI -10.2%. CSIQ -3.9%.
- SA author Short/Long Trader sees a buying opportunity. Though admitting a "historic connection" exists between oil prices and renewable investment, the author sees little impact on rising solar demand from low oil prices going forward.
- Trina, Canadian Solar, and JA Solar (JASO -1.4%) are Short/Long's favorite picks, given their low valuations - all three have P/Es below 10 - and generally healthy fundamentals.
Mon, Jan. 5, 1:18 PM
- WTI crude is down by $2.36 to $50.33/barrel, and briefly fell below $50/barrel for the first time since '09. Brent crude is down $3.18 to $53.24/barrel. Solar stocks, no stranger to getting hit hard by crude's decline, are seeing more pain (TAN -2.1%).
- U.S. solar firms First Solar (FSLR -5.5%), SolarCity (SCTY -5.9%), SunPower (SPWR -4.6%), SunEdison (SUNE -6%), and TerraForm (TERP -4.4%) are especially hard-hit. But other names are also underperforming: CSIQ -3.6%. DQ -5.1%. CSUN -4.2%. JKS -2.8%. SOL -3.5%. The S&P is down 1.8%.
- A reminder: Oil accounts for only ~1% of U.S. electricity production, and transmission/distribution costs often have a bigger impact on electricity prices than energy input costs.
- Industry news: 1) Canadian Solar has completed selling two 10MW Ontario plants to renewable energy investment firm RET. 2) Hanwha (HSOL +0.9%) has struck a deal to supply 80MW of modules for a Chilean solar plant. 3) China Sunergy has won a 30MW solar module contract from an Indian solar park builder.
Dec. 8, 2014, 1:34 PM
- WTI crude oil has fallen 3.7% to $63.42/barrel today, after Morgan Stanley cut its 2015 oil forecast. Henry Hub natural gas is down 4.7% to $3.62/MMBtu.
- Solar stocks, already battered by crude's recent plunge, are joining oil/gas firms in selling off (TAN -2.6%). The Nasdaq is down 0.8%. FSLR -3.8%. SPWR -5.4%. SUNE -4.4%. SOL -6.8%. HSOL -5.9%. JKS -6.4%. YGE -4.3%.
- Industry news: 1) Hanwha is merging its U.S.-listed unit with its Q Cells unit. 2) Trina has bought a 28% stake in Chinese equipment leasing firm Shuntai for $50M to "expand its financing channels" for both its downstream and module ops. 3) Canada has joined the list of countries probing Chinese module vendors for anti-dumping violations.
Dec. 2, 2014, 7:03 PM
- "We believe solar fundamentals are driven mostly by government policies and natural gas prices in most major markets and see almost no impact on near term demand environment as a result of recent oil price volatility," argues Deutsche's Vishal Shah, defending solar stocks after they were clobbered on Friday and Monday in the wake of OPEC's decision not to slash production.
- Shah expects strong 2015 solar demand in the U.S., China, and India, and thinks the U.S. market is especially well-insulated from falling oil prices, given local electricity prices are unlikely to drop near-term.
- He recommends buying SolarCity (NASDAQ:SCTY), SunPower (NASDAQ:SPWR), SunEdison (NYSE:SUNE), Trina (NYSE:TSL), and Vivint (NYSE:VSLR) on weakness. Shah, long a SolarCity bull, adds "improving financing costs and greater penetration in new states could continue to drive positive demand momentum" for SolarCity and Vivint.
- ETFs: KWT, TAN
Nov. 28, 2014, 10:55 AM
- Solar stocks are getting hit hard (TAN -5.1%) after OPEC opted against cutting oil production, leading crude prices to plunge below $70/barrel and sparking huge selloffs in energy/commodity stocks. Fuel cell stocks aren't faring much better.
- Solar decliners: FSLR -6.8%. SPWR -6%. SUNE -5.7%. SCTY -2.9%. CSIQ -10.7%. SOL -9.1%. YGE -7.3%. DQ -7.2%. ENPH -6.8%. TSL -6.9%. JASO -7.5%. RGSE -3.9%. JKS -6.9%. CSUN -3.5%. VSLR -3.7%. HSOL -3.8%.
- Fuel cell decliners: BLDP -6.1%. FCEL -4.5%. PLUG -2.3%. HYGS -5.3%.
Nov. 18, 2014, 11:36 AM
- Under pressure for much of last week, solar stocks are rallying (TAN +4.3%) after SunEdison (SUNE +23.5%) and its TerraForm Power (TERP +29.1%) YieldCo announced they're buying leading wind project developer First Wind for up to $2.4B, and JA Solar (JASO +4%) beat Q3 estimates and upped its full-year cell/module shipment guidance to 3.1GW-3.2GW from 2.9GW-3.1GW.
- Gainers: SCTY +3.9%. SOL +4.5%. TSL +3.7%. YGE +2.7%. JKS +3.4%. HSOL +2.8%. ASTI +6%. DQ +3.2%. RGSE +2.6%.
- SunEdison CEO Ahmad Chatila declares the First Wind deal will double his company's addressable market. Cowen thinks SunEdison "can leverage First Wind’s platform to push into international markets for wind given the potential expiration of the production tax credit for U.S. wind projects."
- Along with its results/guidance, JA announced a $90M buyback; it's good for repurchasing 23% of shares at current levels, if fully used. JA's Q3 gross margin was 15%, -20 bps Q/Q but +370 bps Y/Y. Cell/module shipments rose 15.2% Q/Q and 57% Y/Y to 500.2MW.
Nov. 13, 2014, 1:58 PM
- Solar stocks can't catch a break this week. Down on Tuesday following Vivnt Solar's weak results and guidance, and down yesterday in the wake of Canadian Solar's numbers, they're off today after SunPower provided light 2015 guidance.
- Notable decliners: FSLR -4.3%. SUNE -5%. CSIQ -6.9%. JKS -5%. SOL -4.7%. JASO -3.2%. VSLR -3.7%. SOL -4.7%. CSUN -7.9%.
- Chinese polysilicon maker Daqo (DQ -10.1%), which posted mixed Q3 results this morning, is selling off after opening higher.
- Is a lot of bad news priced in? The Guggenheim Solar ETF (TAN -1.6%) is now down 33% from a March high of $51.07, and not far from a 52-week low of $32.23.
Nov. 11, 2014, 12:15 PM
- Newly-public Vivint Solar (VSLR -21.6%) has nosedived after missing Q3 EPS estimates and guiding for Q4 revenue of $5.5M-$6.5M, below a $7.3M consensus. Installations are expected to fall to 45MW-47MW from Q3's 49MW.
- Rivals SolarCity (SCTY -3%) and SunPower (SPWR -3.2%) are following Vivint lower, as are several other solar names. RGSE -6.2%. ENPH -5.7%. CSIQ -2.5%. JKS -2.2%. DQ -4.1%. CSUN -2.7%.
- Solar ETFs: KWT, TAN
Oct. 13, 2014, 4:09 PM
- Solar and fuel cell companies are among the biggest decliners on a day that saw NYMEX crude oil prices fall below $85/barrel (they're now slightly above), and Reuters report the Saudi government "will accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two." The Nasdaq as a whole finished down 1.4%.
- Of note: Oil only accounts for 1% of U.S. electricity production, and also a small percentage of electricity output in many other large economies.
- Solar decliners: SUNE -10.7%. FSLR -5.9%. SCTY -9.7%. DQ -9.4%. CSIQ -8.1%.JASO -7.7%. SOL -8.6%. TERP -7.5%. JKS -6.7%. CSUN -5.9%. VSLR -6.3%. TSL -8.7%. YGE -5%.
- Fuel cell decliners: FCEL -6%. PLUG -4.7%. BLDP -7.4%.
- Solar ETFs: KWT, TAN
Sep. 12, 2014, 2:14 PM
- Solar stocks are on the move after Trina Solar (TSL +3.7%) CEO Gao Jifan says its factories are operating at full capacity but the company still can't meet the demand for its solar panels.
- China's top three solar panel makers are at full capacity and will have to expand their production, Gao says, noting that TSL's solar panel production will rise to 3.8 GW by year-end, up from ~3.4 GW at the end of June.
- China recently announced new subsidies for smaller solar energy projects, which Goldman Sachs says will make selling power to the country's electrical grid much more lucrative for the operators and will cause prices of solar components to rise.
- CSIQ +2.6%, CSUN +7.4%, YGE +3%, FSLR +1.7%, SPWR +0.8%, JASO +2.4%, SOL +5.4%.
- ETFs: TAN, KWT
Sep. 4, 2014, 1:51 PM
- Making good on an August Bloomberg report, China's National Energy Administration (NEA) has called on local governments to identify and support distributed solar projects in their realms.
- As previously reported, extra subsidies will be encouraged for rural and government projects, public infrastructure installations will be promoted, and financial firms have been told to offer discounted loans.
- The NEA is trying to hit an 8GW 2014 distributed solar installation target in spite of a slow start to the year. Its target for utility-scale projects stands at 6GW.
- Several Chinese solar stocks are rallying, as are a few non-Chinese names. YGE +5.1%. CSIQ +3.6%. JASO +3.8%. TSL +2.3%. SOL +2.1%. HSOL +5.2%. DQ +4.7%. ENPH +6.6%. ASTI +6.1%. RGSE +2.8%. SolarCity (SCTY +5.1%) is up after announcing plans to open 20 new operations centers.
- Solar ETFs: KWT, TAN
Aug. 19, 2014, 10:20 AM
- "Based on our checks, we estimate the probability of [trade settlement] success is now ~30-40% vs. prior expectations of 5-10%," writes Roth. "The narrative for Chinese solar stocks, in our view, has shifted to a more positive tone."
- Roth's remarks follow a letter from a law firm representing the Chinese government to the U.S. Commerce Department proposing talks for a solar tariff suspension agreement. Last week, Beijing retaliated against U.S. solar module tariffs by closing a loophole for U.S. and Korean polysilicon imports.
- Though admitting many Chinese suspension offers have been rejected over the years, Roth thinks "the Chinese government would not have made an offer without believing it would have a decent probability of success as it does not want to be rejected by the US government publicly."
- Notable gainers: YGE +3.9%. TSL +3.9%. JASO +3.3%. SOL +3.9% CSUN +6%. HSOL +4.3%.
- Solar ETFs: TAN, KWT
Aug. 5, 2014, 11:57 AM
- Bloomberg reports China's National Energy Administration (NEA) might soon announce policies calling on local planners to support more distributed solar projects - specifically, projects in industrial zones, and for companies with buildings sporting large rooftops.
- Among others things, local governments will be encouraged to offer more distributed solar subsidies, and to promote installations on public infrastructure. Financial firms will be urged to offer discounted loans, and to create solar investment funds.
- China is aiming for 8GW of 2014 distributed solar installations (to go with 6GW of utility-scale installations), but there have been doubts the target will be hit following a slow start to the year. Deutsche argued in May 2GW could be a more realistic distributed target.
- Chinese solar names are up strongly. U.S. giant First Solar reports after the bell. TSL +8.4%. CSUN +7.6%. JKS +8.3%. SOL +6.7%. CSIQ +6.3%. JASO +5.7%. HSOL +4.8%. YGE +4.8%. DQ +4.1%. YGE +4.8%.
- Solar ETFs: TAN, KWT
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