Collins Stewart Downgrades First Solar (FSLR) to Hold; AVSR Permitting Issue May Weigh on Earnings
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Price: $175.02 -1.39%
Rating Summary:
33 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
33 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Collins Stewart downgraded First Solar (NASDAQ: FSLR) from Buy to Hold with a price target maintained at $40.00.
Collins analyst says, "FSLR announced last evening that due to a construction permit issue, the Department of Energy loan approved for its Antelope Valley Solar Ranch One (AVSR) project has not been funded. As indicated on 9/30/11 when AVSR's sale announcement, the buyer, Exelon Corp (NYSE: EXC)(NotRated), has the right to put the project back to FSLR if initial funding of the loan does not occur within “approximately four months” of 9/30/11. Four months have now passed and the permitting issue is unresolved. FSLR announced last evening that Exelon has agreed to extend the timeframe for initial funding to 2/24/12. If funding has not occurred by that date, and no additional extensions granted, FSLR may be forced to repurchase the project from Exelon for $75M, plus certain other costs that Exelon has incurred. FSLR would then have the right to sell it to another party, though it is not clear if the DoE loan guarantee will be available to that buyer. A sale to another party without the DoE loan is estimated to reduce the gross profit FSLR will generate on AVSR by $100-150M (EPS impact of $1.00-1.50 depending on many factors including the buyer’s cost of capital."
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 $49.03 yesterday.
Collins analyst says, "FSLR announced last evening that due to a construction permit issue, the Department of Energy loan approved for its Antelope Valley Solar Ranch One (AVSR) project has not been funded. As indicated on 9/30/11 when AVSR's sale announcement, the buyer, Exelon Corp (NYSE: EXC)(NotRated), has the right to put the project back to FSLR if initial funding of the loan does not occur within “approximately four months” of 9/30/11. Four months have now passed and the permitting issue is unresolved. FSLR announced last evening that Exelon has agreed to extend the timeframe for initial funding to 2/24/12. If funding has not occurred by that date, and no additional extensions granted, FSLR may be forced to repurchase the project from Exelon for $75M, plus certain other costs that Exelon has incurred. FSLR would then have the right to sell it to another party, though it is not clear if the DoE loan guarantee will be available to that buyer. A sale to another party without the DoE loan is estimated to reduce the gross profit FSLR will generate on AVSR by $100-150M (EPS impact of $1.00-1.50 depending on many factors including the buyer’s cost of capital."
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 $49.03 yesterday.
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