NEW YORK (TheStreet) -- Shares of Canadian Solar (CSIQ - Get Report) were slumping in late-morning trading on Friday as Cowen cut its rating on the stock to "market perform" from "outperform," the Fly reports.
The downgrade comes although the Canadian solar power company posted stronger-than-expected results for the 2016 second quarter this week.
Cowen believes the oversupply situation in the industry is likely to continue for several quarters.
The firm also questions the pace of internal cost reductions the company can execute to drive its 29c/w cost target by the 2017 fiscal fourth quarter, the Fly added.
Cowen also does not believe that Canadian Solar's premium valuation is warranted.
Separately, Canaccord Genuity reduced its price target on shares to $20 from $29 and maintained its "buy" rating.
Following the company's decision to forego its YieldCo listing, the firm believes the sale of project assets should unlock shareholder value.
"The timing of this decision could have been better with oversupply and a cyclical downturn underway, but we appreciate the company's decision to play things safe as was planned," Canaccord wrote in a note this morning.
"Cash from project sales can also help to delever the balance sheet. Although some of the recent uncertainty can now be put to rest, confusion around revenue recognition and timing of asset sales will likely keep the stock volatile," the firm added.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and notable return on equity.
But the team also finds weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.
Recently, 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.
You can view the full analysis from the report here: CSIQ