First Solar Inc. (NASDAQ: FSLR) is generally considered the leader of the U.S. solar power sector. That being said, its lead may come into question after a large drop in its shares after earnings took the market capitalization down to $4.76 billion. What is so interesting here is that First Solar’s report was not all bad. We have seen several analysts chime in on the matter on Thursday.

The first consideration here is that First Solar’s shares were down $4.20, or 8.6%, at $45.04. That is against a 52-week range of $40.25 to $74.29 and a consensus analyst price target of $66.89.

Operating earnings came in at $0.87 per share, much higher than the Thomson Reuters estimate of $0.54. Second-quarter sales were up 4% to $934 million.

The large shock in the report was that net earnings fell a whopping 86% due to restructuring charges. First Solar’s GAAP earnings tanked to $0.13 per share from $0.92 due to an $86 million charge. That restructuring charge was due to its decision to stop making solar panels using TetraSun’s experimental technology.

First Solar’s 2016 earnings guidance was lowered to $3.65 to $3.90 per share from the prior $4.10 to $4.50 range.

24/7 Wall St. has tracked several analyst price target adjustments in First Solar shares. Not all the ratings are negative here, but these were generally followed by lower price targets.

Janney maintained its Buy rating but lowered its fair value estimate to $68 from $89. Its report said:

The company announced strategic changes to its business model on a go forward basis, which will result in significant cost savings, and offered what we consider to be a fairly static guidance for 2016. Looking forward, it continues to make progress in building its backlog of systems projects for 2017, and its move to Series 5 production should further pressure its rivals and improve its competitive position. That said, the restructuring activities appear to be preparation for lower system project volumes in 2017, and we’ve reduced our forecasts to align with a more conservative posture.

Oppenheimer has an Outperform rating and a $56 price target. The firm’s view is that First Solar is executing in a tough operating arena but questions still linger about 2017. Its synopsis said:

First Solar posted results largely in line with expectations as the company announced restructuring charges primarily related to TetraSun and tracker efforts. While First Solar appears to be managing well through a challenging environment, we believe investors will focus on 2017 dynamics with concerns around module profitability and timing for project monetization.

We would not be surprised to see First Solar achieve high-end of 2016 guidance due to strong monetization of its projects in part driven by lower tax equity prices and additional back leverage. We believe bookings suggest almost all of its new sales are module sales but note that all of that backlog has fixed prices and should see improving margin with cost reduction. We remain constructive on what we believe are baseline estimates and valuation.

Credit Suisse has a Neutral rating, which originally looked like it was still calling for big upside. The Credit Suisse target was slashed to $50 from $65. The firm’s report remains cautious:

As we have been highlighting for over a year, we believe earnings will decline significantly in 2017 as high-margin vintage projects are completed and the company transitions more volumes to module sales (instead of system development), which carry less system content. First Solar reported they have 400 MWs of system business booked for 2017, another 300 MWs where they are comfortable, and 300 MWs of opportunities with a lower probability of materializing.

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Merrill Lynch has a Neutral rating, but it lowered its price objective to $61 from $68. The firm believes that a lack of 2017 guidance will be a headwind. Two parts of it report said:

We believe that the lack of CY17 guidance continues to be a near-term headwind. Adding additional module capacity could impact the cash balance, which has helped provide some support to the stock, in our view. On the brighter side, we see First Solar’s positives to include a capital-light shift towards the Series 5 modules (365-390W power) that should allow the company to have a long-term focus on efficiency improvement and cost reduction. …

Our Neutral rating is based on our view that positive sentiment around YieldCo formation will offset fundamental concerns with the stock as it enters what we view as a period of reduced profitability. Lack of exposure to the high growth residential market segment, and the company’s low-efficiency module technology are additional concerns. However, the growth potential of its planned YieldCo JV coupled with investor thirst for yield is likely to protect additional downside, in our view.

Standard & Poor’s downgraded First Solar to Hold from Buy and also cut the price target to $55 from $75. S&P lowered estimates and updated its models. The report said:

We are growing more wary of margins in 2017 given the more aggressive pricing landscape and shift towards module sales. We see less visibility on prior stated system orders for 2017.

Two more reports have been issued but we have not seen the formalities in the calls. JPMorgan lowered its price target to $65 from $69, and Roth Capital has a Buy rating but lowered its price target to $55.

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