BofA/Merrill Lynch Keeps Underperform on First Solar (FSLR) Post Q2
BofA/Merrill Lynch analyst Krish Sankar reiterated an Underperform rating and $50 price target on First Solar (NASDAQ: FSLR) following weak Q2 results due to project delays.
Sankar notes the cause of the 2Q14 miss is delayed revenue recognition at the Campo Verde project, which the company now expects to recognize in 3Q14. Given this, 3Q estimate come up substantially.
Management expects to have an update on its YieldCo plans by its 3Q2014 results call at the latest, the analyst also notes. "The portfolio of eligible projects is robust, but also characterized by assets that have construction timelines or PPA start dates that stretch into 2015/16 and beyond. While this bodes well for a potential vehicles’ growth outlook (development risk notwithstanding), it could also push the listing of a YieldCo to such a point in the future that it may make more sense to sell projects into the increasingly competitive asset acquisition market.On the other hand, the Skytron Energy acquisition could provide an opportunity to acquire assets currently under management in order to build an initial portfolio of sufficient size."
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Shares of First Solar closed at $63.66 yesterday.