First Solar, Inc., SolarCity Corp PT Raised By JPMorgan

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JPMorgan analysts have increased their price target for First Solar, Inc. (NASDAQ:FSLR) and SolarCity Corp (NASDAQ:SCTY), reflecting the upside potential for solar stocks. JPMorgan analysts Paul Coster, Mark Strouse and Paul Chung said in a research note that First Solar’s second-quarter results will be low-point of FY2014 due to project timing. But the Tempe, Arizona-based company’s long-term prospects remain intact.

First Solar has significant growth opportunities in China, India, Latin America

The research firm increased its price target on First Solar from $75 to $76 with an Overweight rating. JPMorgan expects the solar panel manufacturer’s Q2 revenues to come in at $699 million with $0.25 in EPS, lower than the Wall Street consensus of $795 million and $0.33 respectively. For the full year, analysts forecast $3.90 billion in revenues with $2.90 in pro-forma EPS. First Solar has significant growth opportunities in countries that have little access to cheaper gas such as China, Latin America and India.

First Solar

JPMorgan believes that First Solar’s thin-film technology should help the company further its cost/MW lead over the poly-silicon solutions in the utility market over the next three years. The company’s cost is expected to decline from $0.56/watt in Q4, 2013 to $0.38/watt by 2016, putting First Solar in a better position to compete. Moreover, the Tempe-based company plans to introduce TetraSun’s high-efficiency panels this year, opening up opportunities in residential, commercial and community-scale projects.

SolarCity’s customer acquisition momentum will continue

JPMorgan raised its price target for SolarCity from $72 to $77. The research firm maintained its Overweight rating on the stock. Analysts expect SolarCity’s customer acquisition momentum to continue. The company has 29% share in the residential solar market. Analysts expect SolarCity to provide further details on the Silevo acquisition at its second-quarter earnings call. It’s yet to be seen how the company will finance its 1GW solar plant in New York.


The research firm expects the San Mateo-based company to report second quarter retained value of $1.55 billion, a growth of 108% from the same quarter last year. Q2 megawatt deployment is expected to jump 104% YoY to 108MW. JPMorgan forecasts revenues of $63.3 million with a net loss of $0.99 per share.

SolarCity shares were down 1.15% to $64.15 at 12:35 PM EDT on Thursday.

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