UBS is predicting a big increase in U.S. solar installations in upcoming years
Brokerage firm UBS initiated coverage on several solar stocks this morning, including First Solar, Inc. (NASDAQ:FSLR), Solaredge Technologies Inc (NASDAQ:SEDG), and JinkoSolar Holding Co., Ltd. (NYSE:JKS). The firm estimated U.S. solar installations will rise to 14.7 gigawatts in 2020, and gave FSLR, SEDG, and JKS "buy" ratings -- though GTM Research offered a more sobering solar installation forecast on Thursday.
Well-Deserved Bull Note For FSLR Stock
We've been highlighting analysts' skeptical outlook on First Solar for some time now, since the shares have more than doubled over the past year. Coming into today, the majority of analysts tracking the equity had "hold" ratings in place, and the average 12-month price target of $71.35 is essentially in line with the current price of $71.96, after today's 4.7% pop. UBS set its price target at $81 -- territory not seen since 2011.
There's been major call buying relative to put buying on the security in recent weeks, though. Specifically, FSLR sports a 10-day call/put volume ratio of 4.71 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 98th annual percentile.
SEDG Shares Stay Hot
Solaredge Technologies stock has been a big winner for traders over the past year, gaining over 280% in that time. UBS' note -- which set a price target of $63 -- helped the shares tap a fresh record high of $55.55 out of the gate today, last seen up 0.5% at $55.05.
Unlike sector peer FSLR, analysts haven't missed the move from this outperformer. Nine of the 10 brokerage firms in coverage say to buy the security, though the consensus 12-month price target sits down at $51.27.
JinkoSolar Gets Some Analyst Love
JKS is the underperformer of this group, falling on hard times since peaking above $30 back in September to trade at $18.48. UBS analysts expect a move back up to $26, however, well above the average 12-month target of $18.90. Most covering analysts are bearish on JinkoSolar.
This technical weakness has made the solar stock a favorite among short sellers, who control almost one-fifth of the total float. Going by average daily volumes, it would take these short sellers more than two weeks to cover their positions.