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Canadian Solar Receives Approval for $150M Share Repurchase

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Canadian Solar Inc. (CSIQ - Free Report) recently announced that its board of directors has authorized the repurchase of its common stock worth $150 million for a six-month period, beginning Dec 9, 2019, and ending Jun 8, 2020. The timing and amount of any share repurchase will be determined by the company's management, based on market conditions, share price and other factors.

Robust Performance Supporting Share Buybacks

As Canadian Solar caters to a geographically-diverse customer base spread across key global markets, it ended up shipping around 2,387 MW of solar modules globally at the end of the third quarter of 2019. This, in turn, reflects the expanding global footprint of the company. The company currently has a 4-GW pipeline of late-stage, utility-scale solar power projects, with another 415 MWp lined up for construction.

Considering these developments, Canadian Solar continues to witness an improvement in its organic growth. Notably, the company surpassed earnings estimates in seven of the last eight quarters and is expected to continue the trend in the upcoming quarters, primarily attributable to higher solar module sales.

Such robust operating performance has enabled the company to award its shareholders with the latest buyback. Further, as the company continues to focus on reducing capital expenditures, its prospect to reward shareholders improve.

Global Market Trends & Projections to Boost Solar Companies

The global solar market has been rallying since the beginning of 2019, reflecting a significant improvement from the last year. Per a report by Wood Mackenzie, global solar photovoltaic (PV) installations are expected to reach a new high of 114.5 GW in 2019, up 17.5% from 2018. Such projections indicate promising prospects for global solar energy development. As a result, prominent solar players like Canadian Solar, JinkoSolar JKS, ReneSola SOL and SolarEdge Technologies SEDG, among others, are expected to benefit significantly, going forward. Such projections, in turn, are likely to encourage solar companies to buy back shares and reward shareholders.

Price Movement and Zacks Rank

Canadian Solar’s shares have gained 35.1% in a month compared with the industry’s growth of 8.1%.

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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