First Solar, Inc. (NASDAQ:FSLR) had its analyst day recently, and discussed many items among those efficiency and a cost reduction roadmap that exceeded the expectations of Baird analysts Ben Kallo and Tyler Frank. Apart from these items the fact that the company is venturing into the C&I/rooftop market with its CdTe technology and TetraSun pilot line also impressed the analysts. 2014 guidance given by First Solar was below analyst expectations, but the outlook for 2015 and 2016 was surprising.
Efficiency target raised
First Solar, Inc. (NASDAQ:FSLR) claims that it could achieve an efficiency rate similar to the average c-Si modules, in the fourth quarter of 2015, and further, could reach 19.5% efficiency rate in 2017 compared to its previous target of 17.2%. Increased efficiency would help the solar firm to compete more effectively in the C&I space, according to the analysts. Presently, First Solar has 45MW of C&I opportunities, and have 15MW of projects. Analysts believe that the company’s presence in the international markets along with a robust balance sheet would back it to boost its market share, in the C&I/rooftop segment.
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According to First Solar, Inc. (NASDAQ:FSLR) it could reach a total system cost per watt of >$0.99 in 2017, which is 37% below the cost of $1.58, in 2013. A lower cost has been backed by the company’s tracker system, BoS and module efficiency gains. Also, using General Electric’s ProSolar 1500v inverter/transformer system has contributed in savings. Analysts believe that a combination of lower cost and increased efficiency will lower the company’s LCOE, and could open door for new markets.
First Solar guidance excludes new projects contributions
For 2014, First Solar, Inc. (NASDAQ:FSLR) expect an EPS of $2.40 on sales of $3.85 billion with a gross margin of 17%. Analysts estimate an EPS of $2.90 primarily due to higher gross margin and OPEX expectations. For 2015 and 2016, the company expects EPS of $5.25 and $4.25 on revenues of $4.05 billion and $4.15 billion respectively. Analysts note that these numbers exclude the contributions from the new segments including C&I projects and the 100MW TetraSun pilot production line scheduled for June.
Overall, analysts have reiterated an Outperform rating for First Solar, Inc. (NASDAQ:FSLR), and raised the price target to $87. Analysts believe that the company looks set for long-term growth “with its strong balance sheet, international expansion, continued cost reductions and technology gains.”