First Solar Stock Drops 14% In Pre-Market Trading


First Solar was a raft of good news yesterday after the bell, turning in a quarter that obliterated analyst’s expectations and then reporting that it lower its manufacturing costs significantly.

Surely, its time to load up on the stock then, right? Wrong. As two commenters pointed out last night, First Solar’s earnings call was a real downer. And this morning a bunch of analysts changed their ratings on the company. The stock is now off by 14% in pre-market trading from yesterday’s close.

FBR Research lowered its price target from $120 to $110 for the stock. Their reasoning:

With some level of  “capitulation” in expectations, we await for further colour/clarity on the following items before taking a more constructive stand on the stock: (1) signs of the credit market freeze thawing, (2) increased confidence that FSLR can integrate the module into the system cost-effectively, (3) product diversification beyond cadmium telluride (as we believe FSLR has intensified CIGS R&D), (4) how to dial in the revenue/cost associated with solar plants, and (5) increased confidence on the “bankability” of FSLR products in the U.S. market.

Marketwatch has a wrap of other analyst changes:

ThinkEquity Partners cut its rating on First Solar to sell on Wednesday after the U.S.’s largest alternative energy company by market cap issued a cautious outlook for 2009, as part of several analyst actions on the company on Wednesday. Analysts at Hapoalim Securities reiterated their sell rating on the stock. Thomas Weisel Partners said the company’s fourth-quarter results were “strong” but First Solar has elongated payment terms to 45 days from the prior 10 days, “suggesting some installers are having working capital challenges.”