Photovoltaic solar energy solutions provider First Solar's (FSLR) shares rose 13% to $34.27 Wednesday after the company suggested it may be moving closer to settling a legal case and it upped its outlook for sales and margins.
The legal matter involves a lawsuit in which Suniva, a First Solar rival, has petitioned the International trade commission to hike a tariff on solar panels imported to the U.S, which is what First Solar does.
Axiom analyst Gordon Johnson II told clients in a Wednesday research note that, "Assuming Suniva's petition for a minimum price on US solar module imports is compromised at 56 cents per watt, the valuation on FSLR applied by the market, we believe, could approach $76 a share." Working through the math, Johnson concluded that, "Thus, risk-adjusted, it seems, near-term, FSLR's stock could be headed toward $43/shr (or, 30% upside from where it's trading at pre-market on May 3."
Late Tuesday the firm said that it earned $891 million, or 9 cents a share, compare to an expected loss of $693 million, or 13 cents a share.