Jefferies: First Solar's Ability to Sell Topaz Testament to Value of PV Projects

Jefferies & Company has published a research report on First Solar

after the announcement that Topaz would be sold to Berkshire Hathaway's

MidAmerican Energy Holdings. In the report, Jefferies writes, "Topaz is being sold to Berkshire Hathaway's MidAmerican Energy Holdings for over $2B, or over $3/W for the 550MW AC/660MW DC project. We believe this is a positive for the stock, as there has been significant uncertainty regarding Topaz and FSLR's ability to get it constructed and sold. That FSLR has been able to sell Topaz to a high quality buyer is testament to the strong value of PV projects, particularly FSLR's. We believe the market was expecting a lower valuation or that FSLR would not be able to sell Topaz at all, after multiple delays, the loss of the DOE loan guarantee, and then the loss of the potential sale to Enbridge (EEP, $30.59, NC). We believe the >$3/W price is higher than market expectations of ~$2.50-2.75/W. This sale also removes the risk that FSLR would have had to carry the project on its balance sheet." Jefferies maintains its Hold rating and $47 price target on First Solar, which closed yesterday at $46.11