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Baird Analyst Discusses First Solar/SunPower Deal


Shares of First Solar, Inc. (NASDAQ: FSLR) had a massive rally Tuesday, closing up 10.19 percent from its previous close on back of the company posting record earnings for the fourth quarter and news of a joint venture between First Solar and SunPower Corporation (NASDAQ: SPWR).

Ben Kallo, Robert W. Baird & Co. senior analyst, was on CNBC recently to weigh in on the numbers and discuss the deal.

Confusing Results

“We recommended today investors to buy to the strength and we’ll recommend a buy on the open,” Kallo said. “The quarter is confusing; if you add YieldCo, it looks messy.

“A couple of highlights: bookings were very strong; the company continues to improve their technology, which opens up the addressable market.”

He continued, “We’ll get multiple expansions here as they bring on the YieldCo and then several collars [sic.] ahead, they'll follow the S1 for this YieldCo with the two strongest companies in our opinion partnered together at the end of March, and then First Solar will likely hold analyst day at the end of the year.”

Related Link: Why A First Solar/SunPower YieldCo Is A "Two-Headed Dragon Feeding The Beast"

Mutually Beneficial?

When asked if he felt that the SunPower/First Solar deal was more beneficial for one company over the other, Kallo explained that the partnership truly is mutually beneficial.

“One of the things that we don’t look at very often is technology, and we think of solar panels as commoditized,” Kallo replied.

“First Solar and SunPower actually have differentiated technology; albeit they are very different. First Solar is very good for big projects out in the desert – utilities-scaled projects, while SunPower is the best technology for the roof-tops.

“So, by coupling the two companies together, you get access to both those markets by leading brands.”

Latest Ratings for FSLR

Mar 2021Morgan StanleyMaintainsUnderweight
Mar 2021Morgan StanleyMaintainsUnderweight
Mar 2021Credit SuisseUpgradesUnderperformNeutral

View More Analyst Ratings for FSLR
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Posted-In: Baird Ben Kallo CNBC YieldCoAnalyst Color Analyst Ratings Media

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