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Benzinga

First Solar's Analyst Day Should Be A Positive Catalyst

First Solar, Inc. FSLR 0.55% is scheduled to host an Analyst Day on April 5. This would be the first such even since early 2014, during which the company is expected to provide updates on operating metrics targeting potentially through 2018, technology roadmap, capital allocation and other focus areas.

Goldman Sachs’ Brian Lee reiterated a Buy rating on the company, with a price target of $100. Positive Catalysts

Lee expects “positive surprises on the 2017 EPS outlook as well as capacity expansion to be drivers of continued outperformance in the stock,” while pointing out that the stock rallied 46 percent and 21 percent on the day of the last two analyst events.

The analyst also anticipates First Solar’s EPS to stabilize at $4.00–$4.50 in 2017, driven by higher volumes and margins, about 10 percent above the consensus expectations.

Related Link: Solar Installation Data May Put Full-Year Guidance At Risk, Gordon Johnson Says

Additionally, Lee sees the company adding capacity of four lines or 500 MW by mid-2017. However, the company’s current idled capacity of eight lines and the potential for multi-year greenfield additions could drive upside to the expectations. Roadmap

In addition, Lee models fleet average of 18 percent by the end of 2017, which suggests that First Solar is likely to be one year behind on its targets.

The analyst also expects a roadmap extension to 2020 that could potentially exceed 20 percent.

“With $15/sh of net cash and $4-$5/sh of annual FCF into 2018E, we see First Solar well positioned to engage in project pipeline M&A and increase manufacturing capex near-term,” Lee added.

Read more: http://www.benzinga.com/analyst-ratings/analyst-color/16/03/...

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