First Solar Upgrade

Earlier this morning Battle Road Research upgraded shares of First Solar (FSLR) to Buy from Hold and set a $150 price target.

In its note, Battle Road says negative catalysts are in the past and “expectations are too low for 2010.” (First Solar stock is down 9% over the last 12 months, compared with a 49% gain for the Nasdaq.) The stock has been under pressure over concerns about subsidy cuts in Germany, First Solar’s primary market.

Thanks to a process that avoids polysilicon, First Solar continues to have gross margins near 50%. “The company continued to improve its cost per watt and efficiency in the fourth quarter, cementing its cost advantage,” Battle Road says.
Uncertainty related to the European subsidies known as feed-in-tariffs “have been fully absorbed by the stocks.”
Despite concerns, volumes for the first three and half months of 2010 have exceeded expectations. Battle Road notes that industry estimates call for worldwide installations totalling eight to 13 gigawatts in 2010, up from 6.4 gigawatts in 2009.
Shares of First Solar are up 3.8%, or $4.75, today to $128.84.

Labels: First Solar Inc, FSLR, solar analysis, Solar Stocks

posted by Ertai at 12:38 PM