Solar Shares Rise As Credit Suisse, Barclays Turn More Bullish

The solar sector is getting a lift today form bullish comments on the near-term prospects for the group from both Credit Suisse analyst Satya Kumar and Barclays Capital analyst Vishal Shah.

• Credit Suisse’s Kumar writes in a research note that following meetings with companies in Asia and Europe, he now sees global sell-in solar demand for 2010 at 12.7 GW, up from a previous estimate of 10 GW. He also contends that several Chinese solar companies are likely to raised 2010 guidance when they report Q1 results. He lifted his rating on Trina Solar (TSL) to Outperform from Neutral, and also upgrades GT Solar (SOLR) to Outperform from Neutral. He says that demand outside Germany is strong, and that demand in Japan, the U.S., Czech Republic, Belgium, Italy and Australia appears “under appreciated.”
• Barclays Capital’s Shah notes that the sector has underperformed badly this year, down on average about 14%, on concerns about Germany subsidy cuts, currency headwinds and risk to second-half estimates. But he says news on the policy front has improved from both Germany and Italy, and that the prospects for better-than-expected Q3 results are increasing. He raised his rating on Solarfun (SOLF) to Equal Weight from Underweight, while raising his price targets on First Solar (FSLR) to $125, from $100; on Trina to $25, from $23; on Canadian Solar (CSIQ) to $25, from $21; on Yingli (YGE) to $7, from $5; and on ReneSola (SOL) to $7, from $5.

Two other noteworthy items from the solar sector:

• Bloomberg reports that Spain’s Industry Ministry is holding talks with solar power producers on reducing the country’s feed-in-tariff by up to 40%.
• Madrid-based Grupo T-Solar is reportedly mulling an IPO; interesting that according to Bloomberg, the banker on the deal will be the newly bullish Credit Suisse.

In today’s trading:

• First Solar is up $2.60, or 2.2%, to $119.10.
• Trina is up $1.42, or 6%, to $24.92.
• JA Solar is up 41 cents, or 8.2%, to $5.41.
• GT Solar is up 2 cents, or 0.4%, to $5.39.
• ReneSola is up 7 cents, or 1.3%, to $5.68.
• Canadian Solar is up $1.53, or 7%, to $23.56.
• Yingli is up 52 cents, or 4.1%, to $13.07.