Canadian Solar gains on bullish view from biggest solar bear

Canadian Solar Inc. gained the most in almost eight weeks after an analyst said North America’s largest photovoltaic company is undervalued because it has an extensive portfolio of power plants under development.

The Guelph, Ontario-based company increased 5.6 percent Monday to $13.43 at 11:54 a.m. in New York, after climbing as much as 6.6 percent, the most intraday since Feb. 21.

Canadian Solar’s “‘golden egg’ is its chunky project portfolio, implying significant value upside,” Gordon Johnson, an analyst at Axiom Capital Management Inc., said in a research note Monday. Johnson, the solar industry’s most notorious bear, is initiating coverage with a buy rating and forecast a year-end price target of $18.

The manufacturer, which owns solar developer Recurrent Energy, typically builds and sells projects, recycling capital. Earlier this month, it sold two solar farms in China for about $100 million.

“With its sellable, in-the-money, U.S., Chinese and Japanese solar assets, we see Canadian Solar’s positioning today similar to that of First Solar and SunPower in mid-2012,” when they faced a global solar slump, Johnson said in the note.

His bullish outlook on Canadian Solar comes as First Solar Inc. and SunPower Corp., its two primary North American panel competitors, struggle with depressed module prices. Both companies are restructuring their operations, and First Solar has said it may divest its stake in their 8Point3 Energy Partners LP joint venture yieldco.

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.
Sign up for our free monthly newsletter →

Want to learn how we help our clients put it all together? Contact us