The recent action by the U.S. International Trade Commission in finally addressing the trade infractions by the Chinese has negated the risks related to possible tariffs for solar PVs. The growth of industries serving the needs of solar powered cars and solar rooftop installations can now continue.
The tariff decision of the U.S. Department of Commerce is expected to make the final say on the issue. It is hoped that the decision will benefit makers of solar systems and solar powered cars.
But a recent report from Merrill Lynch shows that the headline risk related with tariffs has already been in place for a number of years, and that the industry’s growth last year was huge, with solar installations up by more than 40% compared to the year prior.
Considering these dramatic increases in solar PV installations, it would be very tempting for investors to dabble in the top solar stocks and it is noted that this year would be the best time to deploy capital.
Solar stocks to buy according to the Merrill Lynch team
In this regard, the Merrill Lynch team has identified the four top solar stocks that they rated;
SunEdison Inc. (NYSE: SUNE)
This company is a leader in solar technology. SunEdison develops, finances, installs and operates distributed solar power plants. It delivers stable priced electricity and services to its residential, commercial, government and utility customers.
The price for solar stocks in this company, according to Merrill Lynch, is $32. Consensus price target, based on the Thomson First call is $28.77. The stock closed last week at $19.02 per share.
SunPower Corp. (NASDAQ: SPWR)
This company offers solar power products, such as solar panels, inverters, and balance of systems components. It also designs, manufactures and sells high-performance rooftop and ground-mounted solar power systems.
Price objective, says Merrill Lynch is $42. The solar stocks consensus is fixed at $39.13. Last week, the stock ended at $23.47.
SolarCity Corp. (NASDAQ: SCTY)
This company is a leader in the roof-top solar service market. Currently, it has many long-term service contracts that allow it to enjoy stable cash flow into the future.
Although Merrill Lynch points out that its funding cost is higher going forward, the price will remain under the 6% residual value computations considered key.
Price objective based on Merrill Lynch is a huge $95. The consensus price is lower at $87.70. Solar stocks closed last week at $50.91.
Vivint Solar Inc. (NYSE: VSLR)
This company is a leader in providing distributed solar energy. It is the type of electricity that is generated by a solar system installed at a customer’s location, distributed to residential customers in the United States.
Customers of this company only pay little or no money upfront, receive considerable savings relative to the utility generated electricity, and keep on benefitting from guaranteed energy prices over the 20-year term of their contracts.
Vivint Solar Inc. is the second largest installer of solar PV systems in the United States. Its market share rose to 16% in the third quarter of last year.
Price target according to Merrill Lynch is $24. The consensus figure is $19.50 and the solar stocks closed last week at $8.
