First Solar (FSLR) Down 6% as Analysts Look Over 10-K; Wedbush Downgrades to Underperform, Wunderlich Starts at Sell

Traders and analysts in the solar sector are responding to some dismal data points in First Solar's (Nasdaq: FSLR) 10-K report issued yesterday. The stock has fallen more than 6% today and seems to be dragging down other stocks in the group. The Claymore/MAC Global Solar Index ETF (NYSE: TAN) -- a quick-and-easy way to get a broad picture of the solar sector -- is down about 3.9% this afternoon.

As one analyst from Wedbush pointed out, data in yesterday's filing suggests that average selling prices may be pushed "below the level implied by the company's guidance..." The firm notes that First Solar's "guidance assumes crystalline silicon modules ASPs of $1.20-$1.25 per watt by the end of 2010 versus an average of $1.50-$1.60 per watt for FSLR modules." Elsewhere, Wedbush mentions that the 10-K showed that in Q4 First Solar financed two projects in Germany right off its own balance sheet. The firm argues that "this is indicative of the difficulties obtaining financing for large scale solar projects...." Wedbush downgraded shares of First Solar from Neutral to Underperform and also lowered the stock's price target from $110 to $90.

Also on the analyst front, Wunderlich initiated coverage on First Solar with a Sell rating and $90 price target.

Could it be that investor sentiment in the once-untouchable solar sector is shifting? It seems that such a move would likely come from the top, but is this once-best-of-breed company really ready to collapse? Stay tuned...

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