Analyst Reactions to First Solar (FSLR) Results; Piper Jaffray: "Buy On Weakness"

Hat tip to Street Insider for the following analyst comments on FSLR following earnings:

Citi: 09 guidance cut due primarily to decision to vendor finance a portion of 09 shipments.  Citi is concerned about compressing margins and increasing inventories.  Maintains Hold rating but is cutting estimates and price target goes from 170 to 160

Deutsche Bank: believes FSLR may still be best positioned solar company but is cautious due to customer, industry and macro economic factors.  Maintains Hold rating but cuts price target from 160 to 150.

Merriman Curhan Ford: A large EPS beat was driven by a combination of the Malaysian production ramp bringing down costs and well managed sequential expense growth. Management acknowledged the challenging environment given financing uncertainty and discussed options it is pursuing including direct project investment and adjusting pricing for higher project returns. We believe First Solar should be a core holding.” The firm is maintaining its Buy rating and would be opportunistic buyers on any near-term volatility.

Piper Jaffray: Positives offset by weak NT market commentary and a) FSLR taking ownership of $200M of projects and hence lower recognized revenue; b) extending customer payment terms to 45 days from 10 days; and c) risk to contracted backlog at 10-15% (down from 15-20% in prior conference call).” The firm is maintaining its Buy rating, and would recommend buying the stock on any weakness.

As I mentioned last night, none of these concerns are new and have been expressed for many many months.  I believe FSLR is being hit particularly hard because it has been the best performing solar play and is best of breed so higher expectations were built in.  I also believe that significant weakness in the stock presents long term opportunities. 

Leave a Reply

Your email address will not be published. Required fields are marked *