Friedman Billings is very positive on Applied Materials’ (AMAT) solar business, which makes them increasingly negative on First Solar (FSLR), even after downgrading FSLR to Underperform on May 21. FBR:
…we see the speed of the AMAT-based TF [thin-flim] line rollout (in less than a year’s time) and the increasing number of end customers signing long-term contracts with AMAT’s customers as positive for AMAT but negative for FSLR (because of the competitive threat and its impact on FSLR’s ASPs/margins).
Friedman cites the fast roll-out at AMAT customer Signet Solar, which AMAT is providing the thin film silicon solar PV modules to. FBR is also encouraged by the “Contract-o-rama” Signet is currently experiencing, which means more future business for Applied Materials.
FBR maintains OUTPERFORM on Applied Materials (AMAT), target $25.
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