Buy Call For First Solar, Inc. ,(FSLR)

First Solar, Inc. (NASDAQ: FSLR) which designs and manufactures solar modules through its proprietary thin film semiconductor technology has been given “buy” rating by John Hardy of Broadpoint.Amtech on account of cost reduction guidance from poly-based module producers last week.

Headquartered in Phoenix, Arizona, First Solar manufactures solar modules that employ a thin layer of cadmium telluride semiconductor material to convert sunlight into electricity. The company sells its products to solar project developers and system integrators in Germany.

Hardy believe that First Solar has the capacity to return to expansion & earnings growth in 2011 which will drive company value in future. The major drivers for company growth are expected to be significant backlog with proven partners that will help to buffer near-term weakness, strong balance sheet that can support continued growth & allow for temporary co-financing arrangements and Industry-leading cost structure.

Hardy also believe that though the company has disappointed YTD, but significant margin reset, coupled with capacity expansions in the out-year could help underperforming stock to act better next year. The analysts have revised the FY10 expected revenue and EPS from $2.6B and $8.86 to $2.4B/$7.11 and they have also introduced FY11 revenue and EPS of $3.1B and $8.96.

This valuation is based on Hardy's assumption that FSLR will add two four-line plants to grow in-line with their geographic bottoms-up model and that the company's pro-forma net income growth will be much more in-line with the industry.

The company will be meeting in December 16 to provide updates on systems mix through 2010, as well as potential capacity expansion plans in 2011. Discussion will likely focus on the continuing strong German market, improving financing environment and mid-2010 FIT cut which could bolster 1H10 ASPs.