Trina Solar (TSL) Q1 'Strong' But Some Concerns, Nomura Notes

Nomura Securities analyst Nitin Kumar reiterated a Buy rating and $22 price target on Trina Solar (NYSE: TSL) following the company's Q1 beat and strong Q2 shipment guidance, which has sent shares up 26% today.

Kumar comments, "Trina reported strong 1Q14 earnings and guided for a better-than-expected shipment outlook for 2Q14F. Trina also reiterated guidance of 3.1~3.5GW of external shipments (our forecast: 3.1GW) and 400~500MW of shipments for internal projects (our forecast: 550MW). On the face of it, the numbers are good; however, we are concerned on: 1) 74% increase in inventory in dollar terms; and 2) lack of clarity on 2Q14F shipment breakdown presents risks of cut in forecasts later in the quarter if China demand gets delayed further. We maintain our BUY on TSL, as valuations are very attractive at 2014F P/E of 0.8x and PER of 7x. Upside catalysts near term are also expected from a potential policy update, which should support valuations."

For an analyst ratings summary and ratings history on Trina Solar click here. For more ratings news on Trina Solar click here.

Shares of Trina Solar closed at $10.36 yesterday.

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