First Solar (FSLR) Price Target Reduced to $60 at UBS

UBS maintained a Neutral rating on First Solar (NASDAQ: FSLR) and lowered its price target to $60.00 (from $70.00). The change follows its Q3 print and news it will not pursue a YieldCo.

"FSLR announced their intention to not pursue a YieldCo strategy of their own, citing the fact that it may not strategically align with their needs as well as noting the improved market for purchasing solar assets. We believe the market for solar assets has become more competitive and that the arb opportunity has tightened. FSLR has kept the door open on retaining equity in self-developed plants which may be executed through a number of means; we look to hear more in 1Q15 analyst day," said analyst Stephen Chin.

"While we believe FSLR has strong earnings power in 2015-2016 with high quality assets/contracts and a cost competitive and flexible equipment capacity, we do lower our 2015 EPS target to $5.00 from $5.35 largely due to potential to retain some equity interest and increased opex as FSLR expands globally. We also change our valuation methodology and use a 12x multiple of 2015 EPS mostly due to the lack of visibility into 2017 onward; while we think there is opportunity, competition and margin contraction could become risks should the global supply/demand balance shift significantly," he added.

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 $56.41 yesterday.

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