JPMorgan cut Canadian Solar (NASDAQ:CSIQ) to Underweight from Neutral in a note Wednesday, lowering the 12-month price target to $22 from $32 per share.
Analysts told investors in a note that the firm decided to downgrade the stock until the near-term visibility improves.
"The stock has modestly outperformed our coverage over the past couple of months despite significant declines in global module ASPs, which we believe presents downside risk over the next few quarters," the analysts said.
"While the solar industry clears channel inventory over the coming quarters in certain markets (Europe, US), we expect other areas of the value chain which have relatively more pricing power (e.g. trackers, inverters) to recover sooner than modules, leading us to a relatively less favorable view towards CSIQ near-term."
The analysts also noted that the company’s recent disclosure of a UFLPA detainment "presents a bit of a wild card." Although they are modeling no material impact to US-bound shipments, they believe further issues could weigh on the company’s ability to sell into the relatively higher-ASP US market.