Canadian Solar Inc.’s CSIQ subsidiary, Recurrent Energy, recently sold its remaining equity stake in the 100 megawatts ac (MWac) Mustang solar project to the Renewable Power Group of Goldman Sachs Asset Management. Recurrent Energy expects to recognize the sales revenues from Mustang in the second quarter of 2019.
With the closure of this transaction, Recurrent Energy will complete the sale of its equity stakes in 973-megawatts of solar projects, brought online in 2016, per a report by GTM Research.
Canadian Solar’s Prospects in United States
In the United States, Canadian Solar’s portfolio of operating utility-scale solar power plants stood at 986 MW with an estimated total resale value of approximately $1.2 billion at the end of February 2019. Per the U.S. Energy Information Administration (EIA), solar power is expected to be the fastest growing source of utility-scale electricity generation in the United States for the next two years.
Evidently, electricity generation by utility scale solar power in the United States is expected to grow 10% in 2019 and 17% in 2020. In the light of such growth prospects, we may anticipate more such deals lined up for Canadian Solar in the United States.
Other Deals in the Same Line
Apart from the recent project sell-off to Goldman Sachs, Canadian Solar completed the sale of 20% interest in the 399 MWp Pirapora Solar Complex in Brazil during last December. Recently, it also announced the signing of an agreement for the sale of its 80% interest in a 482.6 MWp portfolio of contracted solar projects in Brazil to Nebras Power Investment Management.
Such robust expansion of its global portfolio is likely to boost the company’s revenue generation capability, considering the global solar market’s growth potential. Evidently, according to an Allied Market Research report, the global solar energy industry is expected to reach $422 billion by 2022, seeing a CAGR of 24.2% from 2016 to 2022.
Shares of Canadian Solar have rallied 5.6% in the past twelve months against the industry’s decline of 3.1%.
Zacks Rank & Key Picks
Canadian Solar carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked stocks from the same sector are Enphase Energy ENPH, DTE Energy Company DTE and SunPower Corporation SPWR, each carrying a Zacks Rank #2 (Buy).
Enphase Energy recorded average positive surprise of 31.67% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has been revised 85.7% upward to 52 cents in the last 90 days.
DTE Energy recorded average positive surprise of 12.24% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has been revised 0.32% upward to 52 cents in the last 90 days.
SunPower recorded average positive surprise of 42.49% in the last four quarters. Its earnings growth estimate for 2019 currently stands at 48.61%.
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