In the wake of Japan’s nuclear crisis, solar stocks are on fire today.
Among those gaining include First Solar, Trina Solar, and, to a lesser extent, Sunpower.
Some of that may be short-covering, as investors play the solar card following headlines about nuclear uncertainties.
But Gordon Johnson of Axiom Capital—currently a solar bear—warns that quakeor no quake, once the dust settles, the issue of government-funded solar subsidies remains unclear following cutbacks in Europe.
That’s reflected in the MAC Solar Energy Index , which in recent weeks had fallen nearly 20 percent after solar-subsidy cuts in Italy and France before rising 7 percent today.
Still, PiperJaffray analyst Ahmar Zaman sliced his rating on so-called “downstream” solar companies, including Sunpower, Canadian Solar, JA Solar, and Trina, saying: “We had been counting on the Japanese market to offset any declines in Italy this year, but with a best case scenario of flat y-o-y growth in the Japanese market, we believe the risk of pricing pressure in the near term is amplified.”