In a recent report, analysts at Axiom shared some harsh opinions about the solar industry. Axiom currently has an Underperform rating on the entire solar industry, and the basis for the firm’s negative outlook is a major discrepancy between consensus forecasts for solar power demand and its own.
Coming Up Short
Axiom covers 37 countries that install solar panels worldwide, and analysts have already confirmed panel installation data for 28 of those 37 countries via national solar industry associations or government press releases.
Based on the numbers, the analysts have lowered their forecast for global solar installations in 2015 by 4.2 percent, from 38,542MW to 36,916MW.
Related Link: Does Low Oil Really Impact Solar?
Consensus Missing Mark
While Axiom’s 4.2 drop in their forecast is bad enough, consensus estimates for solar demand are shockingly higher than Axiom’s.
The report indicates that consensus estimates for global solar installations for 2015 range from about 47,000MW to 55,000MW. These numbers are 27-49 percent higher than Axiom’s updated projections.
In short, Axiom analysts believe that consensus has “grossly” underestimated demand for solar and that the axe will fall on solar stocks in 2015.
“We see considerable downside to Consensus estimates for 2015E and 2016E aggregated end-market solar demand; in fact, we believe demand actually declined for the first time ever, at -3.7% y/y, in 2014, and will fall an incremental -0.4% y/y in 2015E.”
Sell-Rated Stocks
Not surprisingly, Axiom has Sell ratings on the following solar-exposed stocks: Yingli Green Energy Holding Company Ltd YGE 2.01%, First Solar Inc FSLR 1.39% and Trina Solar Ltd TSL 2.09%.
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