Trina Solar Limited (ADR) (NYSE:TSL), a leading Chinese manufacturer of photovoltaic modules that provides electricity for residential, commercial, and industrial applications throughout the world, recently received a SELL rating from Axiom Capital analyst Gordon Johnson. Despite the company’s positive Q4 results, including quarterly revenue growth around 73% year-over-year to around $525 million, Gordon is not convinced that Trina Solar will complete projects promised in 2014 and is recommending SELL Trina Solar Limited (ADR) (NYSE:TSL) with a $6.00 price target.
Gordon argues, “we believe investors are giving TSL credit for projects in ’14 it will likely not sell.” To begin with, “Given TSL does not have permits for its planned 300-350MW of projects in China (which drives the bulk of the EPS/,margin upside in CY14) we do not believe the company will sell more than 50MW of projects in China in CY14.” Gordon also pointed out that, “the company has already shown an inability to accurately predict its ability to sell projects into the Chinese market, underpinned by its failed sale of the Gansu project in C4Q13 (and failed sale, as of 3/7/14, of the project YTD).”
While some investors are abiding by the bull case, Gordon believes that he cannot follow suit saying, “the bull case is predicated on blindly believing management’s ests, as well as buying the stock on a ‘catch up thesis’, which we cannot subscribe to given our focus on fundamentals.”
Gordon is ranked number 2 out of 2436 analysts with a 19.6% average return over S&P-500 and an 83% success rate of recommended stocks.
To continue following Gordon’s recommendations as Trina Solar Limited (ADR) (NYSE:TSL) moves forward with projects in 2014, be sure to download TipRanks and start making informed decisions with advice you can trust.