First Solar Rebounds After Downgrade

An analyst sees a polysilicon oversupply issue for the industry.
Publish date:

Updated from 10:42 a.m. EDT

Shares of

First Solar

(FSLR) - Get Report

were rebounding in Friday trading following an analyst's downgrade.

First Solar was up 6 cents, or 0.4%, to $151. The stock had opened at $141.80 after Collins Stewart analyst Dan Ries said that despite news that China may provide new subsidies for solar installations, the industry remains challenging.

"We do not believe the program in China will meaningfully alter the demand for First Solar product or correct the polysilicon oversupply situation we forecast for 2009 and 2010," Ries said, as he downgraded the Phoenix-based maker of solar power modules to hold from buy, with a price target of $150.39.

Polysilicon is a key ingredient in the making of solar cells for panels that convert sunlight into electricity.

On Thursday,

solar stocks got a boost

on a


report that the Chinese government would invest more in solar power.

Copyright 2009 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.