The solar power stocks and LED stocks have come back handily from their lows. Investors were severely burned here, and perhaps blinded by the light, no pun intended. Credit Suisse has issued detailed research reports in the solar power sector and in the LED lighting sector that appears to be mostly Neutral ratings on the surface. What the firm did not tell you on the surface is that they should have been labeled as Sell ratings, because the target prices are so much lower than the current share prices. Due to this research call's Neutral stance in the headlines, it is possible that this call will be overlooked. If the Credit Suisse research teams are accurate in their assessments of the LED and Solar sectors, then there is about to be some serious pain.
What investors have to recall is that Credit Suisse has changed its research rating parameters to revolve in relation rather than on absolute prices. Sometimes a Neutral is really signaling upside, but as you will see, it can also mean "get the hell out of Dodge" when you see these price targets.
Cree Inc. (CREE) was started as Neutral with a $52 price target, down handily from its $68.77 share price.
First Solar Inc. (FSLR) was started as Neutral and the price target is much lower at $33, versus about $47.50.
GT Advanced Technologies Inc. (GTAT) was started as Neutral with a $3.50 price target, versus a $4.80 current price.
JA Solar Holdings Co. Ltd. (JASO) was started as Neutral with a $6.50 price target, versus a $9.05 share price.
JinkoSolar Holding Co. Ltd. (JKS) was started as Neutral with a $9.50 price target, versus a $13.30 share price.
ReneSola Ltd. (SOL) was started as Underperform with a $1.50 price target, against a current share price of $4.33. Credit Suisse is saying that ReneSola is close to 200% higher than it should be.
SolarCity Corp. (SCTY) was a part of the coverage, but its rating is listed as "restricted" so there is little to add here.
SunEdison Inc. (SUNE) was started with an Outperform rating, but what makes one recall the coverage methodology change is that the listed target price is $8, and that is less than the $9.90 share price.
SunPower Corp. (SPWR) was started as Neutral with a $19 price target, versus a current share price of $25.89.
Trina Solar Ltd. (TSL) was started as Neutral with a $6 price target, against a share price of $7.36.
Veeco Instruments Inc. (VECO) was started as Neutral with a $30 price target, versus a current share price of $34.11.
Yingli Green Energy Holding Co. Ltd. (YGE) was started as Underperform with a $1.80 price target, against a price of $4.07 now. Credit Suisse is saying that Yingli should fall about 60%.
Again, this is where "Neutral" is not your traditional Neutral rating. Credit Suisse is telling you that the solar (and LED) stocks are not just overvalued. The firm thinks these prices are going to crater.