January 24, 2011:
UPDATED: Aha! "Goldman Sachs added First Solar to its Conviction Buy List" (FSLR)
In early pre-market action the stock is up $3.67 at $151.08. Our target for this go-round was the 52-week high of $153.30....From Barron's Tech Trader Daily:
FSLR: Goldman Sets New Six-Month $90 Target, Cuts Estimates
Goldman Sachs’s Mark Wienkes this morning reiterates a Buy rating on shares of solar energy technology vendor First Solar (FSLR), while also cutting his price target to $90 from $150, after trimming his estimates because of falling prices in the solar market overall.On that last go-round the stock top-ticked at $171.96 on Feb. 17.
Unlike most price targets, that is a 6-month price target, not a twelve-month target, and Wienkes emphasizes the approximately 58% upside in the shares at present.
The market has totally changed since the financial crisis in 2008, observes Wienkes.
“Module prices have fallen farther and faster than most in the industry expected, from around $4/Wp in 2009 to $1.10/Wp today as inventory surpluses across less competitive manufacturers have led to dumping at prices below what is a likely understated COGS,” he writes.
“And a new wave of high-scale, low-cost Chinese producers (particularly upstream) have prompted an initial round of shutdowns from higher cost legacy producers.”
After a 56% drop in the stock this year, First Solar’s P/E multiple has been cut in half, even though 2012 EPS estimates have barely budged, Wienkes observes. The problem is a “lack of visibility amid slowing demand and average selling price pressure alongside stalled cost reductions in a risk-off market,” he writes....MORE