First Solar, Inc. (NASDAQ:FSLR) announced after the markets closed on Tuesday that it would offer 8.5 million shares of common stock to the public. The stock jumped initially after the news, but then it fell as much as 9 percent by Wednesday afternoon.

First Solar

Goldman Sachs and Piper Jaffray analysts issued reports to investors updating their views of First Solar, Inc. (NASDAQ:FSLR) in light of the news about the new stock offering. Goldman Sachs has kept their buy rating on the stock, while Piper Jaffray remains neutral.

Piper Jaffray’s View Of First Solar

Piper Jaffray’s Jagadish Iyer and Shawn E. Lockman have their price target for First Solar, Inc. (NASDAQ:FSLR) shares set at $40 per share. They note that along with the share offering, the company reiterated its earnings guidance for the current calendar year, which means that it doesn’t expect to see earnings dilution after the share offering.

However, Iyer and Lockman believe the company’s earnings will see a 10 to 15 cent per share dilution off their 2013 calendar year earnings per share estimate of $4 per share. They predicted that First Solar shares would pull back based on this detail, and they were certainly right.

They do believe however, that the 10 to 15 cent per share dilution may be offset because the extra cash enables the company to take on new projects, possibly as much as 150 megawatts’ worth of projects. If this does happen, it could impact First Solar, Inc. (NASDAQ:FSLR) over the next 12 to 18 months. Then there would be a difference in the company’s 2014 projections. Currently it guided for a decline to between $2.50 and $4 per share for next year. The analysts said they expect “greater clarity” at the company’s next earnings call.

Goldman Sachs’ Take On First Solar

In their report, Goldman Sachs analysts Brian Lee, Thomas Daniels and Britt Boril said they see the company’s unexpected capital raise as a positive for the company and say it has the “potential to create additional ‘dry powder’” for it.

They see more deals in First Solar, Inc. (NASDAQ:FSLR)’s future in terms of project pipelines. They also expect to see higher average selling prices of the assets the company sells after its commercial operation. The other three potential positives for the company are accelerating emerging market growth, greater monetization of alternative assets and increases in the company’s balance sheet, which both Piper Jaffray and Goldman Sachs noted is quite healthy.

Lee, Daniels and Boril have set their price target for First Solar, Inc. (NASDAQ:FSLR) at $62 per share, lowering it from their $64 per share price target previously. They updated their model for the company by moving 30 megawatts of projects out of the second quarter of this year and into the third or fourth quarter. They also accounted for the higher share amount. The analysts lowered their earnings per share estimates for this year, next year and the following year by 6 to 7 percent.

Solar Stocks Taking A Beating

Solar stocks in general don’t seem to be doing well today. Shares of First Solar, Inc. (NASDAQ:FSLR)’s leading competitor SunPower Corporation (NASDAQ:SPWR) shares fell as much as 4 percent in Wednesday afternoon trading.

SolarCity Corp (NASDAQ:SCTY), the solar company headed up by SpaceX and Tesla Motors Inc (NASDAQ:TSLA)’s Elon Musk, fared better, trading sideways at around $34 per share in Wednesday afternoon trading.

Solar stocks might be struggling today because of a section in the report from Piper Jaffray. “We remain cautious on the recent rally in solar as fundamentals have not improved meaningfully,” they wrote.

They point to the tariff war in the European Union, which has created volatility in solar stocks. They said, “Most solar companies are still loss making with overcapacity persisting in the industry.”