Canadian Solar (CSIQ)
UBS Securities lowered its Canadian Solar 12 month price target to $16 from $25 while retaining its Buy rating. The 36% cut reflects a weaker margin outlook, although the rating suggests UBS still sees value in the company’s longer-term solar, storage and project businesses.
The near-term challenge is profitability. Canadian Solar’s second-quarter revenue was $1.2 billion, down 29% from a year earlier, and gross margin fell to 13.9%. Solar module shipments declined, while battery storage shipments grew 73%. For the stock to support a stronger forecast, investors will need to see storage growth turn into earnings and cash flow, alongside better manufacturing margins. The company’s third-quarter guidance suggests that margin recovery may take time.
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