Hapoalim Maintains Sell On First Solar (FSLR)

Hapoalim Securities is maintaining its Sell rating, but is raising its price target to $110 from $105 on First Solar FSLR. In a note sent to investors Hapoalim writes, "On Dec. 14, 2010, FSLR announced guidance for 2011 EPS of $8.75-$9.50, ahead of the Street at $8.61 and the “whisper” of ~$9.00. However, this translates into major execution risk as we estimate it (1) is heavily back-end loaded with 62% of revenue in 2H11, (2) assumes an implied avg. blended ASP of $1.45 (given “external” module ASPs of $1.42 and system ASPs of ~$3.30), (3) is contingent upon the ability to sell a number of major projects, and (4) is founded upon its forecast for balance of system/development costs that form the foundation of % of completion accounting. While the concurrent announcement of the sale of Agua Caliente is encouraging, it is already built into our estimates. While we raise our 2011 EPS estimate from $7.00 to $7.39 on lower cost/watt and taxes, we remain below guidance due to lower blended ASPs of $1.31 (and system ASP of $2.81). Our price target inches up from $105 to $110; we maintain our Sell rating." Shares of FSLR gained 24 cents yesterday to close at $137.04.