Roth chops price target on Canadian Solar

Its second quarter results are in the books and Roth MKM analyst Philip Shen still thinks there is money to be made on Canadian Solar (Canadian Solar Stock Quote, Chart, News, Analysts, Financials NASDAQ:CSIQ).

On August 22, CSIQ reported its Q2, 2024 results. The company posted Gross Profit of $289.6-million on Net Revenue of $1.6-billion.

“We achieved solid results in the second quarter of 2024, with shipments, revenue, and gross margin meeting or surpassing our previous guidance,” CEO Dr. Shawn Qu said. “Today, we have reached an optimal scale—large enough to maintain a highly competitive cost structure yet lean enough to adapt swiftly to changes in industry dynamics. In our module business, we continue to apply a disciplined approach to operations, from strategic capacity investments to stringent order management. At the same time, we are positioning ourselves for sustainable medium- and long-term growth through our energy storage business, e-STORAGE, and global project development platform, Recurrent Energy. Sustainable and ethical growth is key to our strategy, and we are proud to have published our latest Corporate Sustainability Report, featuring expanded disclosures and enhanced transparency.”

The analyst summarized the quarterly results.

“CSIQ delivered a mixed Q2, weak Q3 guide, and lowered its 2024 module shipments/revenue guide and YE’24 capacity targets,” he wrote. “Storage remains a point of differentiation as the company is able to maintain high-teens % margins despite continued module pricing pressure. However, challenges remain, and we expect rebalancing supply and demand in solar to take time. SEA AD/CVD and further US protectionism continue to be the primary risks, in our view.”

In a research update to clients August 25, Shen maintained his “Buy” rating on CSIQ but lowered his price target from $25.00 to $20.00.

The analyst thinks the company will generate EBITDA of $709.0-million on revenue of $7.0-billion in fiscal 2024. He expects those numbers will improve to EBITDA of $1.19-billion on revenue of $8.56-billion in fiscal 2025.