Yesterday, Piper Jaffray added more meat to its bull case for First Solar (FSLR). The firm cited First Solar’s untapped opportunity in the U.S. as the main driver for its increased confidence. Despite the worries surrounding demand in Europe following the news of eventual subsidy cuts by Germany and Spain, Piper believes FSLR is well-positioned to capture growing US market share. StreetInsider:
Based on supply chain checks at the three-day Intersolar Trade Fair, which started today, the firm believes a U.S. plant announcement is on the horizon and estimates that a 350MW+ (megawatt) plant would be needed. Moreover, Piper believes that over the next several years, First Solar “is the only company that can bid these utility projects without the ITC (Investment Tax Credit).”
While the market has now factored in “the bear case of solar demand in Spain”, Piper believes the market has not yet priced in the “enormous US market driven demand from utilities regardless of ITC expansion.” The firm feels that “state incentives are all that is required for First Solar.”
Piper reiterates a BUY, target price $350.