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First Solar (FSLR) is attracting some mixed attention from analysts this morning, after the company offered a solid 2010 outlook last night. The alternative energy issue said it expects sales of $2.7 billion to $2.9 billion for the upcoming fiscal year, outpacing analysts' expectations for $2.4 billion.
"2010 is going to be stronger, we think, than 2009," said CEO Robert Gillette. Global demand is expected to reach 7.5 gigawatts, with overall demand projected to rise 35% per year through 2012. However, he added, "We think supply will still exceed demand in 2010."
However, the company's earnings forecast was more modest. FSLR expects 2010 earnings of $6.05 to $6.85 per share, with the low end of this range falling well short of Wall Street's consensus estimate for $6.55 per share.
Last night's announcement has sparked an onslaught of analyst activity. Canaccord Adams raised its price target from $115 to $130 and backed its hold rating, while Wedbush boosted its price target from $120 to $125 and affirmed a neutral rating. In the same vein, Deutsche Bank hiked its price target on FSLR from $115 to $135 and reiterated its hold opinion.
On the less optimistic side of the fence, Raymond James slashed its rating from strong buy to outperform, and Ardour Capital chopped its price target from $180 to $171 (yet backed its buy rating).
Meanwhile, Barclays thinks that FSLR is trying to set the stage for an upside surprise in 2010 by making "very conservative assumptions about the competitive pricing environment."
Despite today's rush of news on FSLR, the stock is little changed in morning trading. The shares are fractionally lower at last check, backing away from resistance at its 120-day moving average. This trendline has provided a stubborn technical ceiling since mid-September.
Checking in on FSLR's sentiment backdrop, skepticism reigns among investors. Short interest accounts for a whopping 15.5% of the equity's float, and traders on the International Securities Exchange (ISE) have bought to open 1.37 puts for every call on the shares during the past 10 days. This ratio ranks in the 98th annual percentile, marking a near-peak of bearish speculation among option players on the ISE.
Elizabeth Harrow is a senior equities analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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Reader Comments (Page 1 of 1)
12-17-2009 @ 5:38PM
gumbo koontz said...
hello
12-18-2009 @ 12:48PM
gumbo koontz said...
Fine but no thanks... Most of us still prefer safer oil stocks because we are looking forward to gouge eyes out of gasoline customers at the pumps with $4.50 once again. Why would we help solar companies steal business away from Big Ol? No thanks !!
This is the prevailing thinking of Wall street in general.. They are in no rush to save America..
12-18-2009 @ 1:17PM
gumbo koontz said...
What we dont understand is that our next economic upcycle will not last long because we will run short on energy much sooner. See this week sudden drawdowns in inventories. We already wasted a good two years squabbling about enviromental impact on desert critters as well as issues over property owners' rights to be free of unsightly high tension powerlines that will be needed to connect huge solar farms to the grid. Two years lost! We wasted a lot of time in the courtrooms while lawyers cash in fees... I am not saying that environmentalists and property owners are selfish or wrong, but that solar companies are not thinking fast about other opportunities like offering local towns and cities more modest sized solar farms close to the outskirts or even infill plots for quick hookup to the already existing powerlines . We are too focused either on rooftop installations and huge solar farms and nothing in between. Europe got ahead with so many modest sized farms between 500KW to 10MW dotted all over.. That is the sweetest spot. Rooftop installations is great , but it is a little unfair to the rest of us . You see, too much emphasis on rooftop installations is the slowest way to increase energy sources needed to repower our economy to recovery. What America needs right now is terawatts not mere megawatts or gigawatts. Yes, trilloins of watthours... Solar stocks were supposed to be blazing fast climbing in price instead of up and down as we are seeing now.. What it mean , is that we are certain to see $4.50 gasoline back before too long.. Our next upcycle wont last ... No point in rehiring workers only to end up paying through our noses in oil prices.. You see??