Shares of First Solar, Inc. (NASDAQ:FSLR) surged as much as 11 percent in trading on Monday after JPMorgan analysts said it was one of their top picks within the green energy sector. The gains made the solar panel provider one of the S&P 500’s biggest gainers today. So far year to date, it has risen about 50%, but in spite of those gains, it has still underperformed the broader picture of the solar industry as a whole, according to a report from the Trefis Team contributed to Forbes.
Today marks the second day of significant increases for First Solar. Interestingly enough, Julie Hyman of Bloomberg notes that the company has the 13th biggest short interest in terms of float percentage in the S&P 500.
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Positives for First Solar
JPMorgan analyst Paul Coster believes the company will be able to hit its 2014 and 2015 targets, which the company provided recently at its analyst day. He also points to a number of “recent contract wins” which make First Solar, Inc. (NASDAQ:FSLR)’s pipeline look “more robust. In addition, he said the company has projects which it is holding longer, which is resulting in higher margins for the company. Coster has an Overweight rating on First Solar.
Potential catalysts for First Solar
As if First Solar, Inc. (NASDAQ:FSLR) needed any more catalysts for its stock, Trefis provided three more possible catalysts which could be forthcoming. They note that the company’s partnership with General Electric Company (NYSE:GE) will enable it to improve its technology using GE’s thin-film panel manufacturing tech and the related patents. They said new products could be created using this technology which could drive further increases in First Solar.
According to Trefis, if the company improves its bookings, then this would be a positive as well. They note that growth in First Solar’s systems business has been the main driver of its success, but it said it has been pursuing a number of new booking opportunities adding up to about 8 gigawatts. Trefis will be watching to see whether First Solar, Inc. (NASDAQ:FSLR) is able to translate these bookings into new orders.
And finally, they said they’ll be watching whether First Solar makes progress in Japan and China, which is expected to become the biggest solar market by volume in the world this year. Japan could become the second biggest market by volume and the biggest by value. At this point though, First Solar has a relatively small presence in these markets. Trefis analysts say if progress is made in these markets, First Solar could see even more gains.