It was a strange quarter for solar panel maker First Solar last night. The company reiterated its forecast for 2009 revenue, which was probably expected, but it also beat Q2 revenue, leaving some disappointed with the lack of upside for the rest of the year.
Shares of solar panel technology maker First Solar (FSLR) are reversing course this evening, falling to $170 after briefly going as high as $189 following a clean Q2 beat. What’s spooked people are the company’s remarks on a conference call this evening about growing uncertainty in its German market.
Jonathan Hoopes of ThinkEquity concluded this morning that major customers of First Solar are sitting on what could be substantial inventory in their warehouses. Since it’s unlikely that impediments to solar market growth are lifting any time soon, or that said inventory’s going anywhere fast, he cut his price target from $175 to $105, and his estimated EPS for both 2009 and 2010.
Today’s dispatches from the land of the sun reflect caution and opportunity as regards the solar energy technology business. Analyst Gordon L. Johnson with Hapoalim Securities writes in an initiation-of-coverage report on the solar stocks that the credit crunch could hurt solar panel demand because installation of panels is funded up to 70 percent by debt.
As far as I can tell, the sun is operating normally.
But you might think otherwise judging from this week’s action in solar stocks. The sector, which suffered considerable losses yesterday, today went into freefall, with many names in the sector suffering losses of more than 10 percent. Exactly why investors decided to bail on the stocks today is unclear, but there are a number of factors that appear to be contributing to the current solar scare.
Citigroup’s solar technology analyst, Tim Arcuri, laid out the argument today for preferring shares of solar panel maker First Solar (FSLR) over those of SunPower (SPWR)–arguing that people get it wrong when they tend to think the former’s stock is more expensive than the latter’s.
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