First Solar, Inc. (NASDAQ: FSLR)
First Solar is likely to have a positive day in the market today as the result of a key analyst upgrade. However, the upgrade isn’t the only reason that investors should be excited about this stock. Overall, sentiment toward solar power is changing for the better, and that’s likely to lead to strong sales volume. Today, we’ll talk about the analyst upgrade, other news that’s positive for solar and what we can expect to see from FSLR moving forward.
Goldman Sachs Upgrades FSLR
Goldman Sachs announced today that it has upgraded FSLR, moving its rating from “Neutral” to “Buy”. The firm also significantly increased its price target on the stock, setting it at $100 and suggesting a massive upside potential. The analyst that performed the analysis and upgrade was Brian Lee, who believes that First Solar has a strong balance sheet and sees FSLR sales climbing as the result of the increase in renewable mandates in California as well as the extension of of the renewable energy tax credit. Here’s what Lee had to say in the research note:
“In particular, we note FSLR is a key beneficiary of CA’s decision to raise its renewable mandate to 50%, while the extension of the 30% federal ITC for solar in the US – where FSLR has significant leverage – does not appear to be appreciated in either estimates or the stock vs. peers. Coupled with a growing international pipeline, we see these factors driving significant upside to consensus EPS views, with potential for capacity expansion adding another catalyst and unexpected EPS power…”
News That’s Likely To Lead To Strong Sales From FSLR
There’s quite a bit going on at the moment that’s revolving around the solar industry. Ultimately, governments are showing their concern for global warming and working to make a change. As a result, demand for solar is likely to increase. This will help FSLR. As sales climb, stock values climb. Here are the two big stories that recently came out with regard to solar energy:
Federal Tax Credit Extended – As mentioned by Brian Lee in the quote above, the United States Federal Government has made the decision to extend a 30% tax credit for business owners and consumers that make the decision to install solar power or other renewable energy systems in their home or office. This is likely to lead to gains for FSLR as it will increase demand for solar systems in the United States.
Paris Climate Deal – Recently, we also heard about a landmark deal out of Paris. Essentially, Paris has gotten 195 countries to agree to work to reduce greenhouse gas emissions in their nations. To do so, these countries are going to have to look for renewable energy sources in an attempt to reduce reliance on fossil fuels. As a result, demand for solar, such as FSLR is likely to climb!
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from FSLR moving forward. The reality is that not only does the company have a strong balance sheet, conditions with regard to the renewable energy industry as a whole are improving. As a result, there’s no reason to expect anything but positivity from First Solar moving forward.
What Do You Think?
Where do you think FSLR is headed moving forward and why? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]