Growing Solar Demand to Aid Renesola (SOL), Tariffs to Hurt

We have recently issued an updated research report on Renesola Ltd. SOL. The company delivered third-quarter 2018 adjusted earnings of a penny per American Depositary Share (ADS), in line with the Zacks Consensus Estimate. However, the bottom line plunged 50% from the year-ago period’s earnings figure of 2 cents per ADS.

What’s Driving the Stock?

Renesola Ltd. Price and Consensus

Renesola Ltd. Price and Consensus | Renesola Ltd. Quote

ReneSola continues to benefit from a steady flow of contracts from both domestic and international customers. With successful execution of the company’s downstream strategy, it is currently expanding its business in the global markets of Canada, Poland, Hungary, France, Spain and Turkey. Also, the company is actively pursuing opportunities in new markets including South Korea and India.

ReneSola’s growth is strongly driven by its China distributed generation (DG) projects. Although utility-scale solar consistently dominates the Chinese solar market, distributed solar also witnesses rapid growth. The company aims to connect nearly 357 MW of DG projects globally through 2018-2020.

The United States continues to be a large and robust market for the company with 347 MW shovel-ready stage projects, of which 24 MW are under construction. ReneSola boasts a global pipeline of approximately 1.65 GW projects in various stages.

However, with the U.S. administration having imposed a 30% tariff on the import of solar panels and modules, ReneSola’s revenue growth prospects from the nation seems bleak. Also, a significant portion of its revenues is denominated in foreign currencies and hence, the company faces a foreign currency exchange risk.

Zacks Rank & Stocks to Consider

Renesola currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same sector are Canadian Solar Inc. CSIQ, Clearway Energy, Inc. CWEN and Warrior Met Coal Inc. HCC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Solar delivered average positive surprise of 49.66% in the last four reported quarters. The Zacks Consensus Estimate for current-year earnings has been revised 41.6% upward to $2.45 per share over the past 30 days.

Clearway Energy pulled off average earnings surprise of 178.04% in the last four reported quarters. The Zacks Consensus Estimate for 2018 earnings has moved 2.8% north to $1.45 per share over the past 30 days.

Warrior Met Coal came up with average beat of 0.62% in the last four reported quarters. The Zacks Consensus Estimate for current-year bottom line has been raised 0.9% $8.23 per share over the past 30 days.

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