First Solar Could See Another 20% Upside Over The Near Term

First Solar, Inc. FSLR sahres are up more than 13 percent following a big first quarter earnings beat Tuesday.

Senior analyst Gordon Johnson of Axiom Capital believes First Solar’s first quarter beat was due to a large project sale of the company’s Moapa project and not due to operational excellence.

Related Link: First Solar Up 17% After Q1 Report, Raised Guidance, Johnson Upgrade

First Solar did up its expected 2017 sales guidance by $50 million due to improved visibility on project sales and moved its expected gross margins higher by 150 basis points.

Following the earnings beat, Johnson upgraded his rating on First Solar to Hold.

“We believe the investment case on FSLR rests not with how much the company will earn in ’17, but rather where module prices will be in ’19 & what FSLR’s costs will be at that time,” Johnson said.

Axiom Capital believes the fair value of the stock could approach $76 per share by 2019 assuming current module price increases.

The stock traded recently at $34.21, up 12.6 percent on the day.