forbes.com / AP
Contracts continue to roll in for Canadian Solar.
On Friday, shares of the Chinese solar company rose 14.7%, or $2.27, to close at $17.76 on the Nasdaq after it announced it penned a deal to deliver solar panels with 60 megawatts worth of yearly generating capacity for projects in Spain, expanding its position in a key corner of the solar market.
Canadian Solar said it would start delivering the shipments to the German City Solar Group, which is managing the projects, immediately. It expects installation to be complete by the summer.
The company did not disclose financial terms of the agreement.
Spain and Germany are considered key markets for the solar industry because of government incentives that have rapidly accelerated demand. Germany generates the most solar energy from photovoltaic panels in the world, with Spain ranking fourth behind the U.S., according to the Solar Energy Industries Association.
On Wednesday, Canadian Solar led its sector’s rise on the stock market after it announced a very strong quarterly report due to strong demand and operational improvements. (See “Sunny Day For the Solar Sector”)
Friday's rise came on the same day Suntech Power shares rose $5.04, or 7.9%, to $69.42. The rise came in the wake of its quarterly results and subsequent analyst commentary (See "Sunnier On Suntech").
Lehman Brothers analyst Vishal Shah raised his target price for the company to $80 from $65 and maintained a "Buy” rating, saying strong demand, capacity expansion and silicon procurement helped the company beat Wall Street expectations for the third quarter.
"We maintain our constructive view on the longer term growth outlook of Suntech given its scale, technology and cost leadership," Shah said.
Jefferies analyst Paul Clegg raised his price target to $76 from $45 and raised his estimates Friday, saying the company is on its way to exceeding top line and earnings per share expectations going forward because it’s speeding up manufacturing capacity and production faster than expected.
But Clegg warned there are risks for the stock if there are disruptions in subsidies or excess inventory which will push down prices.
Bringing the price of solar power down to an equivalent price with grid power is a top goal for the solar industry because it will help push solar products into the mainstream. Solar products are expensive due at least partially to high costs for polysilicon, which is in high demand and short supply. Investors favor fixed-price contracts, which reduces the risk of high spot prices.
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