Roth Capital Sings the Praises of First Solar, Inc. (FSLR) Following Strong Q2 Beat

First Solar, Inc. (NASDAQ:FSLR) shares jumped nearly 11% in pre-market Friday, after the solar panel maker posted better than expected second-quarter results on strong project pricing and a onetime tax benefit while raising guidance based on project price improvements. Specifically, FSLR posted a non-GAAP EPS of 64c on revenue of $623, beating consensus estimates of 0c on $543 million, respectively. Management raised 2017 revenue guidance to $3.0-3.1 billion (prior guidance of $2.85-2.95 billion), compared to consensus estimates of $2.90 billion.

In reaction, Roth Capital analyst Philip Shen reiterates a Buy rating on FSLR, with a price target of $60, which represents a potential upside of 34% from where the stock is currently trading. (To watch Shen’s track record, click here)

Shen commented, “FSLR is up 55% since the section 201 petition was announced, and we expect it to be up meaningfully post-Q2 results. We continue to see momentum carrying the stock in the months ahead and believe holders have more upside, especially as we get through the 8/15 injury hearing, 9/22 injury determination, 10/3 remedy hearing, and 10/31 remedy determination. On top of all this, the EPS scenarios under a variety of section 201 outcomes combined with the S6 cost structure lead to some compelling valuations.”

“That said, while we see potential for exuberance to drive FSLR much higher, we believe investors should start to be opportunistic at these levels. With the likely upside move today, the stock has likely priced in a healthy dose of section 201 benefit. Moreover, we note that other trade cases like the steel Section 232 appear to be hitting some snags,” the analyst continued.

Overall, analysts are somewhat mixed on FSLR. Out of the 13 analysts polled in the past 3 months, 7 rate First Solar stock a Hold, while 6 rate the stock a Buy. With a return potential of 3%, the stock’s consensus target price stands at $46.25.


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