AmTech suggests buying shares of First Solar (FSLR) going into the company’s 2Q08 earnings (July 31st, 2008). The logic? FSLR sandbags guidance, so the stock usually runs up in anticipation of a beat and raise:
Excluding the reporting period for Q407 where shares were down 34% into the print due to general macro concerns [yup, no macro concerns today…] and a difficult tech tape, shares of FSLR are up 24% on average into earnings reports [up 14% into earnings otherwise]….
We believe the Q208 pre-earnings trade is setting up similarly to Q207 as the company is currently ramping capacity in Malaysia, similar to the German ramp in mid-07. Indeed, we believe the ramp in Malaysia is progressing better than the German ramp in the Spring of ’07. Any unallocated module production out of Malaysia will result in upside given the sold out status at the company.
AmTech reiterates BUY on First Solar (FSLR), target price $450.