Solar Winners & Losers: First Solar Dims

NEW YORK (TheStreet) -- Friday turned downright cloudy for shares of solar companies after analysts from Jeffries & Co. downgraded the sector amid pricing fears.

"We expect rapid growth in solar volumes, but a downward pricing spiral and lack of discipline around capital deployment leave us cautious on cell and module manufacturers," a note from Jeffries said. "Materials providers (ex silicon) appear better positioned to benefit from rapid growth."

In the past year, solar-product pricing fell off after Spain clamped down on solar feed-in tariffs and project financing fell apart due to freezing credit markets. The result was a global glut in modules.

Several solar manufacturers, though, have reported increasing shipments in the most recently completed quarter. Jeffries analysts believe that volume growth will continue in 2010. But, they also noted that overcapacity will likely pressure average selling prices, which, "while accompanied by reduced production costs, may lead to weaker-than-expected 2010 estimates and concerns about value destruction in the sector."

Solar companies downgraded in the Jeffries note included:

First Solar(FSLR Quote), whose shares were cut to hold from buy. Jeffries also reduced its price target to $130 from $200. The biggest loser of the group, First Solar shares finished the day down $8.88, or 6.8%, at $121.54.

Ascent Solar Technologies(ASTI Quote) was downgraded to underperform from hold, though its price target was left at $4. Still, by the close, its shares gained 22 cents, or 3.8%, to $6.08.

China Sunergy(CSUN Quote) was downgraded to underperform from hold. Its price target was also lowered to $3.50 from $4. The company's American depositary shares finished flat on the day at $4.48.

Energy Conversion Devices(ENER Quote) was downgraded to underperform from hold, while its price target was cut nearly in half to $8 from $15. Its shares ended the session down 35 cents, or 2.8%, at $12.36.

Evergreen Solar(ESLR Quote) was downgraded to underperform from buy, as its price target was cut to $1 from $3. Evergreen stock lost 6 cents, or 3.1%, to $1.89.