Zacks Investment Research downgraded shares of First Solar Inc. (FSLR) from NEUTRAL to UNDERPERFORM on July 27, 2012, with a target price of $13.00.
First Solar Inc. is the only stand-alone solar player in the S&P 500 Index. Along with its solar peers, the company is witnessing an oversupply of photovoltaic products leading to a steep drop in Average Selling Prices. Also, the current macro scenario does not bode well for the solar industry, which thrives mainly on subsidies and grants. The company with a higher manufacturing cost base expects the weak trend to continue in 2012. Though to compensate for its drop in margins the company has initiated a major restructuring of its operations in April, the benefits however would not fully accrue for some time. Also, a volatile euro, apprehension over a reduction in European solar subsidies and falling crystalline silicon prices continue to impact valuation. So we advise investors to exit from this Underperform rated stock for now.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
To get a free copy of the research report on First Solar Inc. (FSLR),
click here.
For more information about research offerings from Zacks Investment Research, visit
Zacks.com .
Be the first to comment