- Banc of America is out on First Solar (NASDAQ:FSLR) and JA Solar (NASDAQ:JASO) saying that following the recent pullback in the group, they anticipate solar stocks will regain positive momentum ahead of the Chinese New Year in early February. First, the firm believes that Street estimates remain very low for the group, which should lead to upward revisions of estimates. Second, they believe that next week's Photon PV Show in Shenzhen should serve as a positive catalyst for the stocks. In particular, the program on Jan 15 - the day devoted to silicon - should provide additional confidence in new 2H08 and 2009 silicon supply, which remains a key industry risk.
FSLR remains firm's top pick in the group given strong visibility of its results and long-term viability of its business model. Firm expects substantial upside to the Street's FY08 EPS estimate of $1.99 partially due to the continued strength of the Euro (FSLR's FY08 guidance assumes an exchange rate of $1.31). BAC's FY08 EPS estimate of $2.41 is $0.42 above the Street estimate. Reits Buy and $300 tgt.
JASO: At 19x FY09 EPS estimate, they firm finds JASO attractive due to its relatively superior visibility on silicon supply among solar manufacturers. JASO has secured >300 MW of wafer supply for FY08, above BAC's production forecast of 280 MW. As a result, there may be upside their FY08 EPS estimate of $2.37, which is already $0.29 above the Street. Firm reits Buy and ups their tgt to $84 from $77.
Notablecalls: I expect FSLR and JASO to stage a bounce following BAC's comments. BAC's no axe in Solars but I've seen them successfully call a bottom in the space before. Plus we have a nice catalyst in the horizon in the form of the Photon PV Show in Shenzhen. Companies usually like to announce new deals during or ahead of these Shows and I suspect this will be the case this time as well. Would not be surprised to see FSLR touch $245 today.
High five to Eric Brown and his cabal from BAC's Alt Energy team.
FSLR remains firm's top pick in the group given strong visibility of its results and long-term viability of its business model. Firm expects substantial upside to the Street's FY08 EPS estimate of $1.99 partially due to the continued strength of the Euro (FSLR's FY08 guidance assumes an exchange rate of $1.31). BAC's FY08 EPS estimate of $2.41 is $0.42 above the Street estimate. Reits Buy and $300 tgt.
JASO: At 19x FY09 EPS estimate, they firm finds JASO attractive due to its relatively superior visibility on silicon supply among solar manufacturers. JASO has secured >300 MW of wafer supply for FY08, above BAC's production forecast of 280 MW. As a result, there may be upside their FY08 EPS estimate of $2.37, which is already $0.29 above the Street. Firm reits Buy and ups their tgt to $84 from $77.
Notablecalls: I expect FSLR and JASO to stage a bounce following BAC's comments. BAC's no axe in Solars but I've seen them successfully call a bottom in the space before. Plus we have a nice catalyst in the horizon in the form of the Photon PV Show in Shenzhen. Companies usually like to announce new deals during or ahead of these Shows and I suspect this will be the case this time as well. Would not be surprised to see FSLR touch $245 today.
High five to Eric Brown and his cabal from BAC's Alt Energy team.
No comments:
Post a Comment