By Tiernan Ray at Barron's TechTraderDaily (Eric Savitz!):
What has been a fun day for Chinese solar panel tech company Solarfun (SOLF) is turning out to be not so fun for holders of stock in U.S. solar panel technology vendor First Solar (FSLR). The company yesterday held its first analyst day since its IPO a year ago, and apparently what the company had to say was not quite enough for bulls on the stock: the shares are down almost 6% today, or $12, at $216.44.
A brief roundup of opinion:
- Signal Hill Research analyst Michael Carboy writes that “ultra-bulls” may have come away disappointed from the analyst day, as a result of a few things management said. First, the company is not likely to announce additional plant startups given that it already has four plant startups underway. Carboy says some ultra-bulls may have been looking for signs of expansion in the company’s thin-film module production. Second, but related to the first point, First Solar is not looking to boost gross profit as a percentage of sales by boosting capacity to capture unmet demand, which Carboy thinks is a sound strategy, but which might have disappointed those looking for some margin upside. Carboy rates the shares Hold. He doesn’t have a price target for the stock, but I would note that based on a much lower profit estimate for the year ending Dec., 2009 than peers, at $3.60 per share, his model reflects a much higher P/E for the company, at roughly 64 times.
- The big news, according to CIBC World Markets analyst Adam Hinckley, is that the company will be entering the U.S. utility market for the first time, via the acquisition, announced last week, of DT Solar (which has funding from media mogul Ted Turner)....MORE