Chinese solar companies' decision to increase their output by 15% this year, along with supply increases from other sources, will probably hurt U.S. solar energy companies First Solar (FSLR) and SunPower (SPWR) this year, according to JPMorgan. The firm lowered its estimates and price targets for both and kept Neutral ratings on both stocks.

SUPPLY/DEMAND: Chinese solar energy companies Canadian Solar (CSIQ), JinkoSolar (JKS), and JA Solar (JASO) plan to increase their module supplies by a combined 15% this year, wrote JPMorgan analyst Paul Coster. Meanwhile, new solar companies in other countries, including Argentina and India, are also increasing their output, the analyst warned. As a result, it will take longer than expected for the industry's oversupplied conditions to ease, Coster stated.

SUNPOWER: Although the company is "somewhat undervalued" and has "differentiated technology," SunPower's stock lacks catalysts and visibility, according to Coster. He trimmed his price target on the shares to $8 from $9.

FIRST SOLAR: The company's earnings power won't rebound until 2019, and its risk/reward ratio is "balanced," according to Coster. The analyst trimmed his price target on the shares to $38 from $41 and kept a Neutral rating on the name.

PRICE ACTION: In morning trading, First Solar added 0.5% to $28.72 and SunPower dipped 0.2% to $6.21.