Ronnie Moas Downgrades First Solar, Still Likes Canadian Solar

Standpoint Research's Ronnie Moas downgraded shares of First Solar, Inc. FSLR from Buy to Hold, and reiterated a Buy rating on Canadian Solar Inc. CSIQ.

The analyst noted that First Solar has gained 21.3 percent, outperforming the S&P 500 by 1770 basis points, since he reinstated his Buy recommendation last month.
Following such an absolute and relative surge, however, Moas assured he can no longer award the stock with his highest recommendation.

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"Additionally, Relative Strength on FSLR, now at a four-year high, is at 90 and I rarely hold on to a name when it hits that mark," Moas said. In fact, he likes buying stocks when they're out-of-favor, and selling them when they go back into bullish territory. With relative strength standing at 90, the risk/reward profile at First Solar is no longer attractive.

With a market capitalization of $7.2 billion, First Solar is now trading at 18 times, with $1.8 billion in cash; Moas has set a 2017-2018 price target of $84.00.

Last month, the analyst also reinstated Canadian Solar, when it was trading at $18.41. Now trading at $21.05, Moas still believes the shares remain undervalued by more than 20 percent.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.