Vikram Bagri, an analyst from Citi, maintained the Sell rating on Canadian Solar (CSIQ – Research Report). The associated price target was lowered to $10.00.
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Vikram Bagri has given his Sell rating due to a combination of factors impacting Canadian Solar’s financial performance. The company reported a challenging fourth quarter with several one-time items affecting results. Although module and storage shipments were largely in line with expectations, the gross margin fell significantly short of guidance due to impairments and tariff-related issues. Additionally, the first quarter of the new fiscal year is projected to start with a gross margin decline to 10%, marking the lowest beginning since 2018.
Looking ahead, while there are expectations for sequential improvement in gross margins due to higher storage shipments and better pricing in China, the competitive landscape remains intense. The company’s revenue projections for fiscal year 2025 are notably lower than guidance, reflecting pressures in the storage market and potential challenges in the Chinese module market. These factors, combined with the negative impact of tariffs and higher-than-expected selling and distribution expenses, contribute to the cautious outlook and the Sell rating.