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