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First Solar Shares Tumble After Deutsche Bank Slashes Price Target By 45%

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First Solar Shares Tumble After Deutsche Bank Slashes Price Target By 45%

Shares of First Solar, Inc. (NASDAQ: FSLR) fell 3.66 percent in the Thursday's pre-market hours after Deutsche Bank downgraded the stock to Hold from Buy and cut EPS estimates for 2017 and 2018. The analyst also slashed the price target from $80 to $44.

Analyst Vishal Shah attributed the downgrade to the following factors:

1) "slower than expected ramp in bookings"

2) "likely pause in demand ahead of the series 5 ramp"

3) "potential increase in pricing pressure, driven by aggressive bidding environment from the developers in international segments."

As such, Shah now estimate 2017 EPS of $1.50 versus consensus of $3.18 and 2018 EPS of about $2.50 versus consensus of $3.98.

Related Link: SunPower Shares Higher Following UBS Upgrade To Buy

"Even though FSLR remains one of the best run companies in our coverage, we believe it would be difficult for management to grow earnings amidst some of the expected near term headwinds," Shah wrote in a note.

The analyst expects First Solar to face more pricing pressures due to:

1) "low PPA bids by developers in international markets would drive system/module prices down"

2) "increased capacity expansion outside of China would enable Chinese module suppliers to avoid duties and pass on the cost savings to customers"

3) "ramp of higher efficiency modules at low cost points would make FSLR's technology less competitive."

Shah said checks indicate the companies can on average save about 15c/W by building product outside the US and importing into the U.S. market. As such, he now projects module ASPs in the U.S. market around 54-55c/W compared to about 63c/W about six months back.

Shares of First Solar closed Wednesday's regular trading at $49.13.

Latest Ratings for FSLR

DateFirmActionFromTo
Oct 2019UpgradesMarket PerformMarket Outperform
Apr 2019ReiteratesBuy
Apr 2019ReiteratesBuy

View More Analyst Ratings for FSLR
View the Latest Analyst Ratings

Posted-In: Deutsche Bank Vishal ShahAnalyst Color Downgrades Price Target Top Stories Analyst Ratings Tech Best of Benzinga

 

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