First Solar’s (FSLR) stock has gotten hammered the past few weeks. From a high of $317, the stock now sits just above $242.
Here is some of the bad news that has pushed the stock lower:
- CEO Michael Ahearn dumping half his stock
- Potential legislation banning cadmium
- Tellurium supply constraints (a rare element First Solar uses)
Well, so what, says Deutsche Bank. These are “recycled issues” and therefore should have already been incorporated into the stock price. DB sees the 20% haircut as unwarranted. Deutsche Bank reiterates its BUY and maintains its $300 target.
This logic seems weak: Whether the market should already have incorporated this bad news or not is irrelevant. What matters is whether these issues are real and what their impact will be going forward. It’s hard to read any of them as immaterial.