From Barron's Hot Research:
Caris & Co. says shares of the solar firm will continue to rebound.
First Solar (FSLR: Nasdaq)
By Caris & Co. ($126.60, April 8, 2010)
WE ARE ADJUSTING OUR calendar 2010 estimates to reflect a more even impact from Germany in the first half of 2010.
Our fiscal first-quarter 2010 estimates are reduced, but we are increasing our fiscal second-quarter 2010 estimates and the impact to full-year estimate is minimal.
We think solar demand is stabilizing although overcapacity will continue to pressure margins. We think First Solar (ticker: FSLR) earnings will bottom in the second quarter and shares will continue to rebound as earnings growth materializes. We are maintaining our Above Average rating and $147 price target.
We are lowering our above-consensus first-quarter earnings estimates to $550 million, or $1.66 a share, from $600 million, or $1.90 a share, but our calendar 2010 estimates are not significantly impacted. We had expected a very strong impact from Germany in anticipation of the reduction in feed-in tariff.
While the German impact will be strong, we think it will be spread over the first half of the year as the feed-in tariff is unlikely to be changed until the middle of the year. Therefore, while we lower our first-quarter estimates, our second-quarter estimates are increased, and there is minimal impact on our calendar 2010 estimate.
Our new calendar 2010 earnings estimate is $2.8 billion, or $6.22 a share, compared to our earlier estimate of $2.8 billion, or $6.27 a share. There are no changes to our calendar 2011 estimates....MORE