UPDATE: Goldman Sachs Upgrades First Solar to Buy, Raises PT on Good Upside

In a report published Thursday, Goldman Sachs analyst Brian Lee upgraded the rating on

from Neutral to Buy, and raised the price target from $43.00 to $64.00. In the report, Goldman Sachs noted, “While FSLR shares are up sharply YTD (up 68% vs. the S&P 500 +16%), we see another 24% upside to our new $64, 12-month price target, and we upgrade shares to Buy from Neutral. As the debate around longer-term earnings power continues among many First Solar investors, we see an attractive opportunity on improved near-term visibility against the backdrop of negative sentiment – particularly as we see First Solar increasingly transforming into a free cash flow story. To this end, we see execution on an industry-leading 2.5GW backlog of predominantly North American projects positioning First Solar to generate $5-$6 of free cash flow per share annually through 2015. While we acknowledge some improvement in fundamentals has been priced in given the sharp recovery in FSLR shares off of their mid-2012 lows, elevated short interest levels (e.g., 30%+ of float) suggests investor sentiment remains very negative. In our view, this is likely to result in a relatively subdued level of expectations, despite what we believe are the first real signs of stabilization in the company's growth and earnings outlook – after a few years of persistent declines – and valuation that is less than demanding at 14X our 2014E EPS and 4.4X on EV/EBITDA.” First Solar closed on Wednesday at $51.76.