UBS Reiterates Neutral on First Solar (FSLR) Following 3Q

November 3, 2016 8:58 AM EDT
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Price: $33.66 -3.14%

Rating Summary:
    12 Buy, 28 Hold, 9 Sell

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    Up: 24 | Down: 17 | New: 14
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UBS reiterated a Neutral rating and $45.00 price target on First Solar (NASDAQ: FSLR) following the company's 3Q earnings report. UBS expects that primary investor focus will remain on the upcoming 2017 guidance call and see the Cal Flats/Moapa disclosures as the most challenging datapoint to overcome near term. Current guidance implies ~$50M of gross margin at best from Cal Flats and Moapa, though there is some room for improvement if the Cal Flats tax decision is resolved favorably.

Analyst Julien Dumoulin-Smith commented, "Although FSLR raised EPS guidance on the call, the significant increase in gross margins coupled with a $1B reduction in revenue as California Flats and Moapa are pushed out raise questions around upcoming 2017 guidance. The company currently has ~550MW booked in 2017 systems with near term expectations for 50-150MW more, though margins on the ~380MW of projects from Cal Flats and Moapa are potentially flat margin contributors next year. Net/net the implication that a substantial portion (up to ~2GW+) of earnings will come from modules/components leaves us increasingly cautious on 2017 and reinforces our recent downwards revision."

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 $40.58 yesterday.

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