First Solar, Inc. (NASDAQ: FSLR) is going to be down early this morning after Canaccord Adams decided to downgrade the stock. The brokerage firm decided to cut the rating to Hold from Buy, and the price target is $180.00. This could have implications for the solar ETF, Claymore/MAC Global Solar Energy (NYSE: TAN).
The downgrade is based upon targets being maintained at higher than industry levels at a time when others have been having trouble securing a solid business trend.
The company laid out its operational plans at an analyst meeting yesterday and said it is targeting to cut costs by one-third over the next 5-year term. While the cost is already under $1.00 at $0.93/watt, it wants to target $0.52 to $0.63 per watt over that time frame. At the same time, it wants to increase solar efficiency to 12.5% from almost 11%.
We still have very thin volume in First Solar trading but shares are now indicated down over $4.00 from the $171.19 close. First Solar also makes up close to 8% as one of the largest holdings in the Claymore/MAC Global Solar Energy (NYSE: TAN), the solar ETF. Those shares are actually indicated up marginally but also on very thin volume.
Jon C. Ogg
June 25, 2009