New Solar Analyst Coverage Yields Some Surprises (TSL, YGE, SOLF, FSLR, JASO, CSIQ, STP, SPWRA, PBW, TAN)

Auriga USA has given some surprising new analyst coverage of the renewable technologies sector with eight solar stocks today. The company’s initial review is “positively biased for 2010” with “momentum building for 2H10” yet there are many mild predictions in here.  Trina Solar, Ltd. (NYSE: TSL), Yingli Green Energy Holding Co. (NYSE: YGE), and Solarfun Power Holdings Co. Ltd. (NASDAQ: SOLF) were all positive calls; First Solar, Inc. (NASDAQ: FSLR), JA Solar Holdings, Co., Ltd. (NASDAQ: JASO), Canadian Solar Inc. (NASDAQ: CSIQ), Suntech Power Holdings Co., Ltd. (NYSE: STP), and SunPower Corporation (NASDAQ: SPWRA) were all cautious or even negative.  We have given a brief synopsis of each, along with reactions and pertinent trading data on each.  We are also seeing moves in the PowerShares WilderHill Clean Energy (NYSE: PBW) and the solar pure-play Claymore/MAC Global Solar Energy (NYSE: TAN) ETF products.

Trina Solar, Ltd. (NYSE:TSL) was initiated with a ‘Buy’ rating, mainly on the belief that the 2010 estimates are understated. Auriga noted that if demand strengthens, Trina will boost capacity to meet it. Trina shares have a mean price target of $30.42, near the high end of the shares’ 52-week range of $5.77-$31.19.

Yingli Green Energy Holding Co. (NYSE:YGE) was also initiated with a ‘Buy’ rating. Auriga points out that Yingli is able to produce its PV products at 130% of nameplate capacity. Yingli shares have a mean price target of $15.63 and a 52-week trading range of $5.75-$19.11.

Solarfun Power Holdings Co. Ltd. (NASDAQ:SOLF) was the third company to be initiated with a ‘Buy’ rating. Auriga thinks the shares are undervalued and is bullish on 2010 shipments. Solarfun’s mean price target is $9.39, and its 52-week range is $3.65-$10.78.

First Solar, Inc. (NASDAQ:FSLR) was initiated at ‘Hold’ because Auriga’s analysis demonstrated a positive future for the company, whereas other analysts have focused on near-term pressure on the share price. First Solar’s mean price target is $135.86, and its 52-week range is $98.71-$207.51.

JA Solar Holdings, Co., Ltd. (NASDAQ:JASO) was also initiated with a ‘Hold’ rating. Auriga is wary of the lack of earnings growth, lack of leverage, and also believes that JA Solar will need to increase capex spending. These points are offset somewhat by the company’s positive net cash position. The mean price target for JA Solar is $6.65, near the top of the company’s 52-week range of $2.80-$6.95.

Canadian Solar Inc. (NASDAQ:CSIQ) also earned a ‘Hold’ rating. Auriga believes that EPS estimates are too high and that the company’s margin potential is overrated. Canadian Solar’s mean price target is $26.99, and its 52-week trading range is $5.44-$33.68.

Suntech Power Holdings Co., Ltd. (NYSE:STP) was the fourth company to earn a ‘Hold’ rating. Auriga sees no significant upside to the shares, but no real negatives either. Suntech’s mean target price is $15.08, and its 52-week range is $12.01-$21.38.

SunPower Corporation (NASDAQ:SPWRA) was initiated with a ‘Sell’ rating. Auriga has switched to using GAAP results to value SunPower, and says that it finds “historic price/sales and price/book metrics overstated.” SunPower is also raising cash to fund growth without diluting shareholder value, thus likely to increase the company’s debt. The mean price target for SunPower is $24.45, and the 52-week trading range is $17.82 to $34.00.

As far as solar and alternative energy ETFs, the PowerShares WilderHill Clean Energy (NYSE: PBW) is up 1% today at $10.25 and the 52-week range is $8.01 to $11.95, although the highs in 2008 were over $20.00.  The other solar pure-play Claymore/MAC Global Solar Energy (NYSE: TAN) ETF is up 1.4% at $8.93 on the day.

PAUL AUSICK