Soleil Cuts First Solar Rating

NEW YORK (TheStreet) -- Cloudy skies? An overcast future? Sure, there are plenty of cute solar-ish metaphors one can use to describe the downgrade First Solar(FSLR Quote) received this morning.

But, ultimately, the facts are simple: On Monday, analysts from Soleil Securities dropped the thin-film module manufacturer to sell from hold and cleaved the price target to $96 from $170.

According to a report from Barron's, Soleil analyst Paul Leming cited over-capacity and dipping solar-module pricing as chief concerns, despite the manufacturer's current success in the thin-film market. Consequently, earnings-per-share estimates this year were pulled down to $6.80 from $8.10, while 2010 forecasts were moved to $5.65 from $8.25.

"While we believe FSLR will remain the low-cost producer of a solar module over the next several years, the company is facing a much more difficult margin environment going forward and it is now done with the high-growth portion of its capacity ramp," Leming wrote in a note, according to Barron's.

Citing overcapacity in the polysilicon industry, Leming also added that "what appears to be less widely recognized is that all of the solar value chain -- wafers, cells and modules -- are going to be wrestling with too much capacity for the next several years," according to Barron's.

First Solar shares were bidding at $131.95, down $4.80 or 3.5%, on Monday morning.