Auriga is out with a research note this morning on First Solar (FSLR) calling the company an investment not a trading stock, as the timing of its project business becomes more difficult to read but brings stability to the business model.

They see upside to 2010 EPS estimates guidance up to $7.85/share.  Their model assumes revenue/watt of $1.58/share for module sales and assume that 50% of EPS revenue will occur in Q3.

They believe the 2011 outlook is too bearish at a consensus estimate of $8.24 and see $8.77 for 2011 based on capacity ramps and 2GW of module sales at an average price of $1.36/W.  They believe the more bearish estimates are based on an ASP decline of more than 20% and they see a 15% decline.

They see additional capacity expansion in the US and Vietnam possibly driving EPS to $11 in 2012.  They estimate 2.9GW in module sale with an ASP decline of 15% and an additional $912 million in EPS revenues.  The firm notes it needs to scrutinize its project business model more before publishing formal estimates for 2012. 

Auriga maintains a Buy rating and $175 price target. Shares of FSLR are down fractionally this morning.  On the daily chart FSLR remains bullish and up up trend remains intact.  Volatility will undoubtedly pick once the company reports earnings on Thursday.