Soleil Cuts First Solar Rating
NEW YORK (
) -- Cloudy skies? An overcast future? Sure, there are plenty of cute solar-ish metaphors one can use to describe the downgrade
First Solar
(FSLR) - Get Report
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.
Other solar shares were moving lower in morning trading as well.
Suntech Power
(STP)
,
SunPower
( SPWRA) and
Yingli Green Energy
(YGE)
were losing 1.8%, 2.6% and 1.1% each.
LDK Solar
(LDK)
and
Trina Solar
(TSL)
were tracking in the red as well, down 3.1% and 0.2%, respectively.
-- Written by Sung Moss in New York
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