First Solar Bearish Run

Cheap polysilicon and abundant sources are inded a threat to First Solar.
Some years ago the issue was the lack of suppliers of polysilicon, now is the crash of the commodity making a dent on the solar industry.

But you can still disagree, and if the economy gets a quick recovery, all commodities, including polysilicon, might get a speculative Bullish Rally.
Just don't try to guess where the bottom is...

First Solar (FSLR) is overvalued and faces a serious problem in the form of cheap polysilicon. Sound familiar? It should, it's been the refrain from analysts since May. Today's shot at First Solar comes from Gordon Johnson of Hapoalim Securities, on Tech Ticker.

Johnson says First Solar is a sell, with a target of $90. His argument trods well worn ground, but in case you missed it, here it is.

First Solar makes its panels out of cadmium telluride. Most of its competitors make panels out of polysilicon. Last summer, thanks to generous subsidies around the world, especially in Spain, the price of polysilicon shot up to $450 per kg. At such a high price, First Solar had an advantage on the competition.

However, the price has crashed to $60 per kg, and might fall even further, thus wiping out First Solar's advantage. First Solar had told investors not to worry, that it could compete with lowered polysilicon prices. During it's Q2 conference call, it signaled a slight change in its thinking saying it would give rebates to customers to lower the price of the panels. Another worry from Q2, the odd revenue recognition detailed by Barron's, and refuted by e4.

Full article

First Solar, Inc. (Public, NASDAQ:FSLR) The chart does show how deep the current Bearish Rally has taken this Solar Stock:

Labels: Bearish, First Solar Inc, FSLR, Polysilicon, Solar Stocks

posted by Ertai at 10:33 AM