First Solar, Inc. (NASDAQ: FSLR)
On Tuesday, First Solar, the global solar systems and components provider, shot up 8% after Goldman Sachs upgraded the stock from “Neutral” to “Buy” and increased the price target to $100 per share.
The Goldman report is anchored in their belief that the solar sector will be shifting from growth to value in 2016 and accordingly company performance and stock prices will be driven by ‘value’ metrics. They also noted that there are several factors generating new business for the solar sector including; the U.S. government’s extension of solar tax credits, and the historic international deal struck at the Paris Climate Summit in December. In addition several US states are on a fast track to raise renewable energy requirements. Goldman Sachs analyst Brian Lee noted that First Solar is well positioned with $1.8 billion in cash and equivalents and less than $300 million in total debt at the end of the third quarter. That will give the company an advantage over competitors as state and federal incentives boost the U.S. market. “We believe this positions the company better than peers to navigate short-term tightening in financial conditions and maintain a relatively low cost of capital,” Lee said. “No developer has more offensive firepower than First Solar heading into the next several years.” Bloomberg News
FSLR Technical Analysis
In 2015 First Solar outperformed both the solar sector and broader indices. For the year the sector and indices closed down slightly while FSLR climbed 48% to close at $65.99. On Tuesday the stock gapped up almost $4 from Monday’s close of $66.72 to open at $70.56. The stock had modest early morning selling, along with the markets, and found support at the low of the day of $70.11. From there it bounced back above the opening price and stayed above that level for the balance of the day before closing at $72.03. The stock has not traded at these levels since September 2014 where it found congestion between $72 and $72.50. Above this range, the stock could continue to see resistance at the whole and half-dollar levels. On general market weakness or a relief pullback, FSLR could find some support at yesterday’s intra-day levels near $71.50, $71, $70.30 and LOD at $70.11. A break of the low on volume could flush the stock to the gap fill at $66.76.
First Solar Company Profile
First Solar, Inc. is a global provider of solar energy solutions. The Company designs, manufactures and sells photovoltaic (PV) solar modules, and also develops, designs, constructs and sells PV solar power solutions. The Company operates through two segments: components and systems. The Company’s components segment involves the design, manufacture and sale of solar modules, which convert sunlight into electricity. The systems segment provides turn-key PV solar power systems or solar solutions for systems primarily using its solar modules. The Company also manufactures crystalline silicon solar modules and single-axis mounting systems with tracking capabilities. The Company offers its products and services for residential, commercial and industrial applications, including solar power system project developers, system integrators and solar plant operators, throughout the Americas, Asia, Australia, the Middle East and Africa. Google Finance