Goldman Sachs Warms Up To Solar Stocks In 2019

The sun may be rising on solar stocks in 2019, but according to one Wall Street analyst several popular solar stocks may be left in the shade this year.

The Analyst

Goldman Sachs analyst Brian Lee made the following adjustments to his solar coverage:

• First Solar, Inc. FSLR upgraded from Neutral to Buy, price target raised from $48 to $57.
• Canadian Solar Inc. CSIQ upgraded from Neutral to Buy, price target raised from $14 to $19.
• Pattern Energy Group Inc PEGI reiterated at Buy with a $22 price target.
• Vivint Solar Inc VSLR reiterated at Buy, price target lowered from $7.50 to $6.50.
• Solaredge Technologies Inc SEDG reiterated at Sell with a $32 price target.
• JinkoSolar Holding Co., Ltd. JKS reiterated at Sell with an $8 target.

The Thesis

The trade war, oversupply concerns and China policy decisions were the primary drivers of underperformance among solar stocks in 2018, Lee said in the note, but conditions should be at least somewhat better in 2019.

“Heading into 2019, green shoots are emerging: demand is improving, ASPs are stabilizing, and China is likely a positive catalyst in terms of policy,” Lee wrote Thursday.

He said the solar market seems to be in the process of bottoming and potentially making a U-shaped recovery starting this year. Negative earnings revisions appear to be over, prices have stabilized, and growth is trending in a positive direction. In fact, Goldman is predicting 98GW of global solar demand this year, up 12 percent from 2018 levels.

Price Action

Here’s how the stocks mentioned were trading Thursday:

• JinkoSolar was down 1.5 percent.
• Solaredge was up 0.5 percent.
• Vivent was down 1.8 percent.
• Pattern Energy was down 0.8 percent.
• Canadian Solar was up 3.3 percent.
• First Solar was up 1.8 percent.

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