J.P. Morgan’s Christopher Blansett this morning cut his price target on shares of First Solar (FSLR) to $20 from $35, reiterating an Underweight rating, and withdrew his price target for SunPower (SPWR), writing that the global subsidies for solar power “show no signs of stabilization,” resulting in uncertain pricing for solar power modules.
One the one hand, “expected solar industry growth in C12 and beyond is likely to benefit foreign (Chinese and Japanese) manufacturing given that demand growth will likely materialize in their countries,” writes Blansett.
On the other hand, “It remains to be seen when the price of modules will begin to stabilize, though we do think we are near that point.”
He adds, “Although existing project pipelines should allow for a reasonable 2012 revenue outlook for our Solar PV names, we don�t expect significant new projects beyond what�s in the current backlog.”
Blansett cut his multiple of tangible book value for First Solar from 0.9 times to 0.5 times, and he thinks that both First Solar and SunPower will trade below tangible book for the duration of this year.
First Solar shares are currently down 32 cents, or 1.5%, at $21.41, while SunPower stock is off 14 cents, or 2.4%, at $5.76.
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