Deutsche Cuts Price Target on First Solar (FSLR) Following New 2012 Outlook
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Price: $225.56 +0.84%
Rating Summary:
37 Buy, 18 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
37 Buy, 18 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Deutsche Bank is maintaining its Hold rating on shares of First Solar (NASDAQ: FSLR), but is reducing its price target from $45 to $30.
The firm reports many investors may have been expecting management to report 2012 EPS guidance in the $7 to $8 range following the Topaz project sale. The company's guidance actually calls for earnings of $3.75-$4.25. Revenue for the year is expected to be between $3.7 billion and $4 billion. The consensus was calling for $4.06 billion in sales and earnings of $7.30 per share ahead of the company's new outlook.
The company also announced it looks to generate $900 million to $1 billion in operating cash flow and also looks to invest $375-$425 million in capex. An analyst at the firm comments, "we believe it would likely invest this cash in acquiring new pipeline in markets such as India to achieve 2014 target of almost 100% revenue from sustainable markets."
Deutsche Bank reports, "Significant portion of take-or-pay contracts end in 2012 and FSLR would find it difficult to extend these contracts out by a few years. Even if the company was able to do so, several customers are in significant financial stress and we think are unlikely to honor these contracts. Finally, any contracts that FSLR negotiates with customers outside of Europe would likely be short term and would have characteristics similar to spot volumes."
Based on the companies new outlook, the firm is cutting its FY11 and FY12 EPS estimates from $6.85 and $7.00 to $6.00 and $4.23. Revenue for the two years is forecasted t be $2.88 billion and $3.98 billion.
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 $42.57 yesterday.
The firm reports many investors may have been expecting management to report 2012 EPS guidance in the $7 to $8 range following the Topaz project sale. The company's guidance actually calls for earnings of $3.75-$4.25. Revenue for the year is expected to be between $3.7 billion and $4 billion. The consensus was calling for $4.06 billion in sales and earnings of $7.30 per share ahead of the company's new outlook.
The company also announced it looks to generate $900 million to $1 billion in operating cash flow and also looks to invest $375-$425 million in capex. An analyst at the firm comments, "we believe it would likely invest this cash in acquiring new pipeline in markets such as India to achieve 2014 target of almost 100% revenue from sustainable markets."
Deutsche Bank reports, "Significant portion of take-or-pay contracts end in 2012 and FSLR would find it difficult to extend these contracts out by a few years. Even if the company was able to do so, several customers are in significant financial stress and we think are unlikely to honor these contracts. Finally, any contracts that FSLR negotiates with customers outside of Europe would likely be short term and would have characteristics similar to spot volumes."
Based on the companies new outlook, the firm is cutting its FY11 and FY12 EPS estimates from $6.85 and $7.00 to $6.00 and $4.23. Revenue for the two years is forecasted t be $2.88 billion and $3.98 billion.
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 $42.57 yesterday.
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