Kaufman Bros. Downgrades First Solar (FSLR) to Hold; Stock Appears Cheap, but Uncertainty Now Warrants Caution

Kaufman Bros. downgraded First Solar (NASDAQ: FSLR) from Buy to Hold, price target slashes from $152 to $50.

Kaufman analyst says, "Yesterday, FSLR announced that its CEO, Mr. Rob Gillette, announced his resignation effective immediately. He will be replaced on an interim basis by the Chairman and former CEO, Mr. Mike Ahearn. The company also announced that it has formed a search committee to find a permanent CEO. The news came out at an awkward time, which serves to increase investor uncertainty around the transition. We have not been able to discuss these events with the company, but believe that without greater clarity it makes sense to move to the sidelines. FSLR has a "type A" culture that is built around the stock price through options. The recent decline likely put a lot of pressure on Mr. Gillette, especially with the founder and former CEO still acting as the Chairman of the Board. We do not expect a disruption in operations at the firm as the Chairman is intimately knowledgeable about all aspects of the firm...Therefore, we are lowering our forecasts for 2011. We are reducing our revenue forecast from $3.65 billion to $3.56 billion and our EPS projection from $9.48/sh. to $8.10/sh."

For more ratings news on First Solar click here and for the rating history of First Solar click here.

Shares of First Solar closed at $43.27 yesterday.

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