However, the company's requirement for funds to finance its expansion plans may put pressure on its profitability over the short-term.Nevertheless, with a predominantly bullish outlook, we maintain our Buy recommendation on CSIQ with a six-month target price of $41.75. Price appreciation to our near-term valuation target represents 19.8% upside potential. A study by Solarbuzz reveals that worldwide installations of solar power systems are expected to grow at an annual rate of 17.4% up to 2010, led by on-grid shipments.
The company projects solar module sales to increase to 200-220MW in 2008. This is slated to rise with the introduction of e-Modules in Canadian Solar s product portfolio in the first quarter. The company projects 30-40MW of e-Modules sales in 2008. We expect revenue to continue to increase through 2009.
On July 15, Canadian Solar announced a 9MW sales agreement for its e-Modules with Conergy, USA. The contract runs till June 2009. On July 14, Canadian Solar announced that it expects net revenues for the second quarter to be in the range of $210-$214 million, compared to the forecasted range of $185-$190 million.
UDR Provides Solid Dividend
UDR, Inc. (UDR) is an apartment real estate investment trust (REIT) that owns, operates, acquires, develops, and renovates middle-market apartment communities. In early March, the company sold 40% of its portfolio located primarily in slower growth, lower rent, Midwestern and Southern markets. While this transaction will be dilutive in 2008, overall we like this deal as the company will improve its asset base and balance sheet.
The company will use the majority of the proceeds to acquire better assets in higher rent areas, pay down debt, buy back shares, and possibly pay a one-time special dividend. We maintain our Buy rating due to valuation and continued problems in the for-sale housing market.
At 14.4x 2008 FFO [funds from operations] estimates, UDR is trading right at peer group averages. We have lowered our 2008 full year FFO estimate to $1.55 per share due to dilution from assets sales. UDR continues to post same-store revenue and NOI [net operating income] results in line with peers. In addition, the company is a skilled redeveloper, which increases the earnings profile of older properties.
We expect apartments to be one of the safer REIT sectors in a free falling economy. UDR is a good stock to acquire for its relatively attractive dividend yield, now 5.9%, and current discount to NAV, now about 15%. We are setting our price target at $25.00 per share or 16.0x 2008 FFO estimates.
NCR Corp. to Generate Cash
NCR Corporation (NCR) is a large, well-established global technology firm with a diversified product base. Following several years of stagnant revenue growth, the company has begun to post gains in its Financial Self-Service segment, its largest division.
We are encouraged that the company is now posting earnings growth through improved top-line growth, which we believe is sustainable for the foreseeable future as its customers seek to cut costs through increased automation. NCR is also targeting new industry verticals, for instance healthcare and travel and hospitality, to expand its market reach for self-service business.
Strong sales of ATM machines in the Financial Self Services unit and checkout scanners in the Retail Automation business drove NCR to raise full-year 2007 guidance twice last year. Following strong 2007 as well as first quarter 2008 results, NCR has raised 2008 revenue guidance again.
Shares of NCR are currently trading at 16.5x our 2008 EPS estimate of $1.54, a small discount to the industry mean as well as the industry median. Given the improved outlook for NCR, we maintain our Buy rating on the shares of NCR. Our six-month target price of $32.00 reflects a P/E multiple of 20.8x our 2008 EPS estimate, a premium to the industry median.
