when it comes to solar, wall street is blinded by the light - all in one solar street light

Analysts on Wall Street need
They can wear sunglasses when they are looking at the solar industry.
Latest Chaos in Wall Street's suspicious relationship with the solar industry: SunPower's earnings outlook released this week (SPWR -Get Report)
And the response of analysts to the numbers that proved to be terrible.
There is no denying that Wall Street has great confidence in the solar industry.
The traditional utility is a cash flow machine.
In the relatively early stages of this industry, solar energy is a cash sponge.
Solar energy is an industry that goes through the grocery cycle like a teenage boy.
The biggest investment is oil prices.
But there are other factors.
The only constant is the continued impact of Wall Street. bordering-on-
Romance in the industry.
The history of solar energy has been relatively shortened, and analysts are confused about the performance of the industry.
Never like before. and-
As in a conference call deciding on the results and prospects of SunPower's services later on Tuesday, the meeting resulted in an analyst advising management to defend themselves so as not to look like a liar.
Analysts from R. W.
Baird summed up the relationship between the seller analyst and the management of the solar company, describing the guidance that Wall Street just heard as blind --siding.
"Maybe not everyone, but I," the analyst added.
"The fact that six stores have lowered the rating of the company is not just him.
Not Baird, Baird chose to retain its "buy" rating on the stock despite "blind"
On the side of the news.
But there are six.
Deutsche Bank cut its target price by 70%, saying fairly gently in a subsequent statement that the news "surprised many investors ".
Credit Suisse lowered its rating from excellent performance to neutral, with a target cut from $32 to $12, adding that the performance raised questions about the "credibility" of management.
"Wall Street is notorious for closing doors after horses leave the barn.
But when you are so surprised by the Management comments that you have to cut the price target of the stock by 60% or 70%, it is certainly unfair to blame the management for the full responsibility?
This is not about getting management out of trouble.
Of course, there is a prohibition on disclosure before the earnings report.
But there are plenty of opportunities to enter a quiet period to gather clues from the situation of the business you are being paid to analyze.
In fact, the solar industry is undergoing structural changes --
From the collapse in spare parts prices and increased competition from China
Challenges from power companies to tax credit changes
This is certainly predictable.
The grim reality, however, is that no one but this year knows what income is left.
Barclays has just cut its 2017 profit forecast for First Solar. FSLR -Get Report)too $1.
$98 more than the previous $3. 05.
This is not a gradual decline.
This acknowledges that the predictions anyone used to rely on when considering investing in First Solar were third higher than the company now thinks. (
By the way, when Barclays did so, it maintained a "overweight" rating on the stock. )
Solar stocks have always been an imaginative world for some investors.
On 2006, 18 months after the first solar listing, its share price rose from $24 at the time of the IPO to $317. 50.
Wall Street has been cheering for it.
There are also some reassurances.
First Solar reached $160 in March 2011.
Then it reached $15 in June of the second year.
Solar stock is a good customer of the bank. SolarCity (SCTY)
With the help of Bank of America/Merrill Lynch and KeyBank, just gone to the credit market to raise $0. 16 billion in new debt, an increase from the original intention to raise $0. 117 billion.
This is for a company that plans to be acquired by its cousin Tesla (TSLA -Get Report).
8 point Energy Partners (CAFD)
The first solar and solar joint venture went public in June and raised $0. 425 billion in the IPO.
Prior to that, it raised $0. 525 billion in the credit market, led by Deutsche Bank's Agricultural Credit Bank. P.
Morgan, Citigroup and Goldman Sachs
Familiar name, there is a big report on the solar industry.
There is always an inherent conflict in the reporting of listed companies by analysts hired by investment banks.
That's why there is a solid Chinese wall between the disciplines in these houses.
But there are other ways for analysts to avoid being blinded by the light of the solar industry.