Monday, July 09, 2007

First Solar (NASDAQ:FSLR): BAC ups tgt to $115

- Banc of America is reiterating their Buy rating on First Solar (NASDAQ:FSLR) and raising price target to $115 from $91. Firm's new DCF-derived price target stems from several adjustments to their model, including higher capacity, lower costs/watt, and a declining tax rate, offset by lower prices. The new model results in a FY08 EPS estimate of $1.51 (vs. $1.32 previously and Street estimate of $1.14) and a FY10 EPS estimate of $7.59. The new price target of $115 implies a 15x multiple of firm's FY10 estimate, which they believe is warranted given the visibility of FSLR's growth.

Following its recent run, First Solar appears expensive based at 84x the FY08 Street estimate of $1.14. BAC has confidence that First Solar will soundly exceed the FY08 Street estimate due to a declining tax rate (29% in FY08 vs. 41% in FY07) and higher capacity (450 MW by end of FY08). More importantly, they believe that First Solar remains attractive at current levels based on their view that the company's earnings will meaningfully accelerate in the years following FY08. Specifically, the firm expects First Solar will increase EPS to over $7.50 by FY10 from $1.51 in FY08.

Notablecalls: When you have an agressive mover like FSLR just 4 bucks away from the $100 level and there's a tier-1 firm out with a positive call, you buy the stock! No matter how boring the call is! It's going to hit that $100 today.


Tom said...

Off topic/
What did you think of BIDU/downgrade by citigroup?

notablecalls said...

Citi's been right on BIDU in the past.

A said...

great call NC... I saw ur post, thought about buying pre-market at 98, only to repent at COB when I got off work to see what FSLR did today!! Phew!! great run! Its going to pull back to 100 to test the gap I think!!

notablecalls said...

a, thanks.