Let The Sun Shine In: The Many Reasons First Solar Is Now A Buy

Analysts at Needham turned bullish on First Solar, Inc. (NASDAQ: FSLR) for several key reasons. The firm's Y. Edwin Mok upgrades solar company boasts a "robust" bookings activity that will cover most of its supply through 2020. Beyond the end of the decade, the company will likely see strong demand along with better pricing to support growth, the analyst wrote in the upgrade note. While sales will likely re-accelerate in mid-2018, so will the company's profit, which will support a solid top- and bottom-line growth in 2019 and beyond.

One of the main drivers of a Hold rating was based on concerns of First Solar's slowing system business, but now it is likely that the company will report upside to its own target of approximately 1GW of system shipments per year based on growing demand, up-selling potential and expansion in international markets.

First Solar also stands to benefit from the political climate, Mok also said. Specifically, the United States International Trade Commission's recommendation for President Donald Trump to impose significant remedies on solar module importers could be the next catalyst for First Solar's stock.

Finally, the company will host an Analyst Day presentation on Dec. 5 in which management will likely discuss its long-term plan. Investors should be aware that the stock rallied on average approximately 20 percent over the past three similar events, the analyst said (see his track record here).

"While heading into a near-term 1H18 financial trough, we believe the improved visibility into a more robust long-term outlook will support a higher share price," Mok said.

At time of publication, shares of First Solar were up 22.39 percent at $58.65.

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