First Solar (FLSR) Likely To Beat But Will That Be Enough - Baird

Baird analyst, Ben Kallo, is comfortable with his above consensus view on First Solar (NASDAQ: FSLR) but investors remain focused on 2017, and he believes "near-term results are less likely to drive share appreciation" until there is clarity around 2017. The company is expected to report on April 27th after the close. The firm maintained an Outperform rating and $68 PT.

For Q1:16, he expects revenue of $1.062B vs consensus of $949.4M, gross margin of 17.8% vs. 20.1%, and non-GAAP EPS of $0.87 vs. $0.76. That said, revenue estimates range from ~$573M to $1.274B, and EPS estimates range from $0.06 to $1.30.

FSLR has not provided 2017 guidance as it continues to optimize its order book and adjust for the extension of the ITC. Although the lack of visibility to 2017 may be a near-term overhang, we believe FSLR will remain an industry leader over the long term, and its technology, sales channels, and project development experience should drive earnings growth.

Utility-scale solar demand will continue to be strong in the US. FSLR anticipates ~4 GW of incremental U.S. opportunities from 2016-2020 and the analyst believes FSLR is well positioned to win projects given its increasing panel efficiency, low cost structures, long-standing utility relationships, and strong balance sheet which is becoming increasingly important to counter-parties.

The SUNE chapter 11 filing should help remove an overhang on the sector and strengthens FSLR’s competitive position. The filing should be a positive for the sector, and FSLR should continue to strengthen its position as the leading utility-scale developer and module provider.

For an analyst ratings summary and ratings history on First Solar click here. For more ratings news on First Solar click here.

Shares of First Solar closed at $61.54 yesterday.

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