First Solar, Inc. (FSLR, $136.31, $11,626mln Market Cap, Buy, $173.00 Price Target)

Auriga is out this morning maintaining its Buy rating and upping the price target on First Solar (FSLR) to $173 (27% above current levels).  The firm sees significantly less exposure to the Euro next year and higher production levels so is increasing 2011 EPS of $8.64.

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More details of the report..

– sees module efficiency incrementally improving to around 12% next year and production of 2.08GW for 2011
– assuming 700MW in US installations for 2011, but 150 of that not recognized until 2012
– sees 14% decline in ASP and 4% decline in module gross margins to 47% in 2011

“The timing of revenue recognition related to the North American pipeline will likely contribute the greatest amount of volatility to our estimates in 2011. That said, we believe the company has already hedged at least 15% of its 2011 Euro exposure, while the German factories create a natural hedge on another 350MW of production. Lastly, we believe the FSLR will sell a combined 100MW of modules into projects located in China, Australia, India, and the Middle East. Based on all of the assumptions stated above, we believe the profitability in First Solar’s model is understated by the consensus estimates and are therefore increasing our price target.”