J.P. Morgan analyst Paul Coster dives into shares of First Solar, Inc. (NASDAQ:FSLR) upon closer investigation of his model for the solar manufacturer, realizing margin expansion expectations in the fiscal year of 2018 are “likely too aggressive.” As such, Coster reiterates a Neutral rating on FSLR while lowering the price target from $65 to $53.

Additionally, the analyst trims margin estimates in the fiscal year of 2018, cutting the EPS projection from $3.93 to $3.27, which is above the Street’s estimate of $3.21. Coster’s revenue forecast for the fiscal year of 2018 remains at $3,559 million, slightly above consensus of $3,501 million. Estimates for the fiscal year of 2016 through 2017 remain unchanged.

Coster believes, “Although introduction of the high energy-density Series-5 product is expected in mid-2017 we believe industry conditions will likely remain somewhat unfavorable and margin expansion will be impacted by industry-wide panel over-supply. We are therefore trimming our FY18 EPS estimates, though we continue to expect some margin expansion y/y.”

“Although the stock seems somewhat undervalued, we maintain our Neutral rating. Much depends on execution – we believe investors will likely remain cautious near-term though the long-term opportunity for revenue growth and margin expansion driven by differentiated technology remains compelling,” Coster concludes.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst Paul Coster is ranked #3,880 out of 4,185 analysts. Coster has a 46% success rating and faces a loss of 4.3% in his yearly returns. However, when recommending FSLR, Coster gains 24.7% in average profits on the stock.

TipRanks analytics demonstrate FSLR as a Buy. Based on 16 analysts polled in the last 3 months, 6 rate a Buy on FSLR, 9 maintain a Hold, while 1 issues a Sell. The 12-month price target stands at $54.00, marking a nearly 40% upside from where the shares last closed.