August 26, 2009

Credit Suisse Launches With Outperform Rating

Credit Suisse Solar ana;yst Satyua Kumar this morning launched coverage of Trina Solar (TSL) with an Outperform rating and $40 price target. The stock closed Monday at $26.09.

“While we see some risk to Q4 shipment volumes for the industry - TSL included - we believe TSL’s low cost structure, leverage to China demand and valuation are compelling,” he writes. Kumar contends there is “substantial alpha” in solar companies with low cost structures.

Kumar expects the company to post 2010 revenue of $841 million with EPS of $2.74, above the Street at $834 million and $2.32. His price target stems from 14.5x his 2010 EPS estimate. And he says that if growth in solar demand resumes in 2010, due to higher demand in the U.S. and China, price elasticity in other major markets, and improving credit conditions “there could be substantial upside” to his already above-consensus estimates.

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