2011 is starting off as a banner year for solar stock. As more companies report strong results the sector seems ripe for a continued rise. After seeing SunPower
Earnings per share of $0.52 beat estimates by $0.08 -- but at this point I would be concerned if a solar company didn't beat estimates. Analysts have been slow to keep up with solar earnings, and with Chinese firms adding capacity even faster than internal expectations, it's tough make anything more than an educated guess. But the real concern for solar has been how demand will play our in 2011.
So far, so good, according to management.
Of the 1.7 to 1.75 GW of modules Yingli plans to deliver in 2011, nearly 1.4 GW are already under contract, most with prepayments. This echoes what we heard last quarter from JA Solar
Germany has dominated demand for years, with markets like Italy and Spain demonstrating somewhat more erratic demand. But as costs fall and solar becomes more competitive, manufacturers are quickly diversifying their geographic demand profile. Yingli expects 25-30% of its 2011 demand to come from China and the U.S. with Germany falling to 35-40%.
Solar stocks have been on a tear in 2011 and Yingli has followed the industry higher, climbing 17.2%. But there's still value to be had even after the climb. Yingli trades at just 9.5 times its trailing earnings, with big growth planned for 2011. Module shipments are projected to rise at least 60%, and the stock has room to run as demand continues to look strong.
So far this quarter we've seen nothing but blowout numbers from solar manufacturers, with Trina Solar
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