Stifel Calls Canadian Solar 'One Of The Leading Producers,' Initiates With Buy, $25 Target

• Canadian Solar, Inc. CSIQ has seen a 47.78 percent decline in its share price in the past three months.
• Stifel’s Sven Eenmaa has initiated coverage of Canadian Solar with a Buy rating and price target of $25.
• Eenmaa believes that the company has among the leading manufacturing scales and cost road maps, and is well positioned to benefit from growth in the underpenetrated and “price-elastic” global solar PV markets.

Analyst Sven Eenmaa also believes that Canadian Solar’s stock is attractively valued at present, given “the company’s core manufacturing earnings potential and PV project development and monetization capabilities.”

The growth of the global solar PV market is expected to remain robust, with installations expected to expand by 23 percent, year on year, in 2015 and then continuing to grow at a CAGR of 14 percent through 2018.

Even with this expected rapid growth, the global cumulative solar PV-based electricity generation capacity by the end of 2018 is expected to add up to less than 7 percent of the total global electricity generation installed capacity, accounting for less than 4 percent of global electricity generation.

According to the Stifel report, “With one of the leading cost structures and manufacturing capabilities, we expect Canadian Solar to continue to deliver mid- to high-teens gross margins.”

In addition, the company has strengthened its downstream development operations with the acquisition of Recurrent Energy, with its late-stage project pipeline expanding to 2.4GW.