Trina Solar (NYSE:TSL) remains in the good graces of Citigroup (NYSE:C), as the banking giant maintained its "Buy" rating on the company.
Citi also raised its price target on the company from $30 to $36.
Trina continues to be the favorite pick of Citigroup in the solar sector, citing "its strong balance sheet, more measured approach to the systems business, leading cost position, and budding track record for execution.”
Citi said they liked the gross margins of the company, which should continue to be strong, and improve in the second half of 2010, assuming prices remain stable and more cost downs.
The idea they can expand in a larger way and pay for it through operating cash flow is a positive for the company as well, as the overall solar sector has been punished with low margins at a time when demand seems to be growing.
That's the best case scenario, but increasing the outsourcing of wafers/cells, along with the real possibility of supply of poly tightens up, which could put pressure on margins.
No comments:
Post a Comment