Canaccord Bullish on First Solar (FSLR) Following Facility Expansion News

August 19, 2008 11:46 AM EDT

Following yesterday's announcement from First Solar (Nasdaq: FSLR) that it would expand capacity at its Perrysburg, Ohio facility, Canaccord Adams is out with a research note this morning considering what the news means for the stock. The firm maintains a Buy rating and $400 price target on shares of First Solar.

Specifically, First Solar will be adding one extra production line, or about 48MW of solar capacity, as well as additional office space and R&D. Canaccord said, "The capacity ramp shows demand is strong beyond that which First Solar’s five other plants can support."

Looking ahead, Canaccord believes the expansion will add to First Solar's earnings, but said that it is keeping estimates unchanged "to be conservative." Canaccord's $400 price target on First Solar is based on a PEG (price-to-earnings growth) ratio of 1x the firm's FY10 EPS estimate. With shares of First Solar trading around $256.50 today, the firm's price target represents potential upside of 56% from current levels.

First Solar, Inc. designs, manufactures, and sells solar electric power modules using a proprietary thin film semiconductor technology.

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