Cowen Trims PT on First Solar (FSLR) Following Q2 Results; Some Execution Risk Remains

Cowen and Company trims its price target on First Solar (Nasdaq: FSLR) from $68 down to $62 and maintains a Market Perform rating following Q2 results.

Analyst Robert Stone issued the following commentary: Revenue was $544MM (vs. St. $796MM), as an inverter integration issue at Desert Sunlight caused revenue recognition to be delayed into H2. GM was 17.0% (vs. St. 16.7%), the full year expectation was raised to 18-19% from 17-18%. Expenses were $90.8MM (vs. St. $96.1MM), on temporarily lower R&D, the full year expectation was raised to $380-$395MM from $365-$385MM, largely offsetting the GM increase.

Expected future shipments rose to 3.2GW from 2.8GWquarter, largely on 700MW booked in July. The opportunity set expanded 500MW to 12.7GW, and flow-through looks good as "late stage" deals remained around 1.3GW, including Luz del Norte (141MW). We moved $305MM of Desert Sunlight revenue from Q2:14 into Q3 and Q4, and lifted gross margin and expenses modestly. We now model 2014 EPS of $2.60 (vs. prior $2.58). Our revenue estimates for 2014-16 and EPS estimates for 2015-16 are unchanged.

For an analyst ratings summary and ratings history on First Solar click here. For more ratings news on First Solar click here.

First Solar closed at $63.66 yesterday.

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