Auriga Upgrades Canadian Solar To Buy $CSIQ
Green Stocks Central
Auriga isout upgrading Canadian Solar (CSIQ) this morning to Buy from Hold, butlowered the price target from $25 to $21. The firm believes that CSIQ’s pre-announcement in which it announced a Forex hit as well as lowermargins, has been priced in for the most part ahead of earnings (noofficial date announced yet).
Says the firm: “The gross margin decline was worse than expected, and when combined with the charge to Other Income for inadequately hedgingexposure to the Euro, we believe management has set a low enough bar for Q1 earnings. Our new price target is 13x our 2011 EPS of $1.58.”
Other highlights in Auriga’s call:
For the stock to outperform, management needs to up guidance on theconference call above 700MW which is the high end of previous guidance.
Auriga lowers gross margins assumptions to 13.6% for 2010 and 14.1%for next year
Reduces Q1 estimate to a loss of .08/share due to $20 millionforex hit, lower margins
No change in shipment forecast of 190MW for Q1 or 675MW for fullyear.
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Shares of CSIQ are well off the morning lows of $16/share, but Istill feel like it needs to test the $15 level before a meaningfulrecovery can take place.
Auriga Upgrades Canadian Solar (CSIQ) To Buy, "Negative Catalyst Has Passed"
