Wunderlich Securities released a note on GT Solar on Wednesday morning stating that its valuation was a steal based on the likelihood of an acquisition by a larger equipment company.
In the case of First Solar, Piper Jaffray is betting that its upcoming annual guidance conference call will be a catalyst for shares to move higher.
GT Solar shares were up more than 5% in early trading on Wednesday.First Solar shares were up a more modest 2%, but still the only other considerable gainer among U.S. solar stocks. Wunderlich analyst Theodore O'Neill wrote on Wednesday morning, "Investors should take a hard look at the unusual valuation of GT Solar (SOLR) stock relative to its peers. At the current valuation of 5.7x our 2011 EPS estimate of $1.37, an acquisition of GT Solar by almost any equipment company would be immediately accretive even at twice the price (assuming redundancies were eliminated)." Likely acquirers of GT Solar, according to Wuderlich, are semiconductor or solar equipment makers. Amtech Systems (ASYS), Applied Materials (AMAT), BTUI (BTUI) and Novellus (NVLS). Wunderlich argues that paying a 2x premium to the current GT Solar share price would still be accretive for the acquiring company. General analyst expectation ahead of the First Solar annual conference call -- it's simply a conference call this year and not an actual investor day as in past years -- is for a positive catalyst, though whether it's just for First Solar or for the solar stock group as a whole remains open to debate. First Solar will be hosting the call on the afternoon of Dec. 14. Piper Jaffray is betting that the call will be a positive for First Solar shares specifically, starting the revenue and EPS guidance for 2011 above the Street consensus $3.6 billion and $8.50..
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