Analyst Actions: First Solar Estimates Revised, PT Raised $5 at Credit Suisse; Shares Tumble 7%


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Analysts at Credit Suisse have revised their earnings estimates for First Solar, Inc. ( FSLR ) while also raising its target price on the stock to $28 from $23 a share.

"Bottomline - we expect a pull-back. Usually our commentary following an analyst day event centers on the takeaways from the event. But usually, stocks do not appreciate 45% following an analyst day," said Credit Suisse. "As we previewed, FSLR provided a new efficiency/cost roadmap, and beat 2013 consensus due to a change in revenue recognition policy on Desert Sunlight project (we had highlighted this too). Company is also acquiring a c-Si start up (not material, but we like the intent). But yesterday's stock move not just priced in the upside from these positives, but that and much more by giving undue credit to a change in rev-rec policy. Execution, competition and market risks still remain not sufficiently discounted at current levels."

The firm added that "FSLR's strategy is not one that will add value overnight, but one that results in company earning its valuation as it improves backlog over time ... If you liked the macro themes of increased market adoption for solar, or earnings power from projects, we prefer companies like WFR that have not appreciated as much as FSLR. What we liked from FSLR's event is the reason we feel a downgrade would not send the right message today. However, our skeptical tone highlights the risks given current valuation."

The firm revised its 2013, 2014 and 2015 EPS estimates to $4.39, $3.20 and $0.79, from $2.92, $2.37 and $2.60 respectively.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

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