Wedbush Downgrades First Solar (FSLR) to Hold; PT Cut to $110

Wedbush Morgan downgrades First Solar (Nasdaq: FSLR) from Buy to Hold and lowered its price target from $175 to $110. The firm is out with a cautious note on the entire solar sector this morning, citing "increasingly negative trends that emerged from Q3:08 earnings."

The firm sees:

• an increased risk to 2009 revenues due to lack of financing for PV projects
  
• exposure to foreign currency including the U.S dollar/Euro exchange rate
  
• the economic downturn possibly delaying large scale utility projects; and
  
• increasingly negative investor sentiment toward solar stocks given the uncertainty over financing and broader economic environment.

Wedbush cut its FY08, FY09 and FY10 estimates on First Solar: FY08 GAAP EPS move from $3.90 to $3.88, FY09 EPS move from $7.74 to $7.35, and FY10 EPS move from $9.59 to $8.06. The Street is currently expecting First Solar to report FY08 EPS of $3.92 and FY09 EPS of $7.29.

With shares of First Solar trading around $119.77 today (up 3% from yesterday's close), Wedbush's reduced price target represents potential downside of about 8% from current levels.

First Solar, Inc. designs, manufactures, and sells solar electric power modules using a proprietary thin film semiconductor technology.

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