NEW YORK (TheStreet) -- Shares of Canadian Solar (CSIQ) - Get Canadian Solar Inc. Report were declining in late morning trading on Wednesday as Barclays reduced its stock rating to "equal weight" from "overweight" this morning.
The firm cut its price target to $14 from $24, noting that the solar power manufacturer's stock poses a greater risk relative to its peers, such as First Solar (FSLR) and 8Point3 Energy Partners (CAFD).
"While management has taken a slightly more cautious stance on capacity expansion and asset monetization, we think the key takeaway here is really the broader (and unavoidable) issue of unintended consequences of government policy distorting the solar supply/demand relationship on a global scale," Barclays said in an analyst note.
As a result, Barclays lowered its 2016 and 2017 earnings estimates to $2.00 per share and $1.54 per share, respectively. Previously, the firm was looking for Canadian Solar to earn $2.35 per share in 2016 and $2.65 per share in 2017.
Canadian Solar has a compelling advantage from its module market share and operating history, but still poses near-term industry risks, Barclays added.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CANADIAN SOLAR INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.
You can view the full analysis from the report here: