Monday, July 16, 2007

First Solar (FSLR): BAC ups tgt to $140

From Notable Calls:

- Banc of America is yet again upping their tgt on First Solar (NASDAQ:FSLR) saying the co has the best fundamentals in the business. Tgt goes to $140 from $115. In BAC's view, FSLR's 7/9 announcement of $1.3 billion of new sales contracts validates its position as the best model in the PV business.

Notable Calls doesn't relay BofA's thoughts on valuation. As Barrons reported Friday (and CI passed along yesterday):

The facts are: First Solar boasts more than a $8 billion market value on about $400 million in expected 2007 revenues and 53 cents in earnings per share. At 115, it is trading at 96 times 2008 earnings and 14 times sales.

The Barrons story went on to say:

The jump is reminiscent of's rise in the halcyon days when the book merchandiser would pump out hyperbole about increasing "eyeballs" and "wallet share." The responses from analysts who follow First Solar seemed downright Blodget-esque. ThinkEquity Partners analyst Paul Cheng raised his price target to 115 from 80 (Friday's close of 115.97 already topped that level) based on an earnings-per-share estimate of $5.39 for the year 2012. That's five years from now!

For some reason the mention of the analysts made me think of Enron and I dug into the link-vault for this PDF of a powerpoint given to Enron's board on Aug. 13, 2001 i.e. 3 1/2 months before the really, really big bankruptcy filing.

On page 15, Enron (conveniently for us) gathered together the analyst ratings on ENE. For example, here's the first one on the list:

Bank of America Montgomery Securities-Dan Tulis/Will Maze-
Strong Buy-$60

From the U.S. Department of Justice (15 page PDF)