First Solar Drops to Lowest in Four Years on Germany Slump
First Solar fell 3.5 percent to $53.93 at 8:31 a.m. in premarket trading on the Nasdaq Stock Market. The shares have dropped 59 percent this year and are trading at their lowest since March 2007.
Paul Leming, an analyst at Ticonderoga Securities in New York, downgraded First Solar to “sell” from “neutral” in a report today because an expected surge in installations ahead of a planned reduction in German subsidies hasn’t materialized and further cuts may be gaining political support.
“Thin-film module prices are now at or below 90 cents per watt, a level at which First Solar’s module manufacturing is at best break-even after operating expenses,” Leming said in a note to clients.
Leming reduced his 2011 profit estimate to $8 a share from $8.23 a share, and for 2012 to $6.30 from $7 a share. He expects 2013 earnings will fall short of that and initiated a 12-month price target of $40 a share.
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