Goldman: First Solar A Better Bet Than SunPower (FSLR, SPWRA, JKS, SOL, YGE, TSL)

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SOLAR INVESTING IDEAS

• Popular long ideas: FSLR, STP, LDK
• Popular short ideas: FSLR, JASO, STP
• Top dividend plays: None
• Pro favorites: WFR, EMKR, FSLR

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SOLAR COVERAGE

Companies focused on Solar energy generation and technology

• Small Solar Companies May Experience Hard Landing (SOLR, AMAT, FSLR, SPWRA, JKS, YGE)
• Plenty Of Analyst Chatter On Solar Stocks, Most Of It Negative (TSL, LDK, HSOL, CSIQ, JASO, WFR)
• Expect Lower Guidance From First Solar; JA Solar Makes A Deal (FSLR, JASO, STP, TSL, YGE)

SOLAR CHART

SOLAR METRICS

Avg. Market Cap:	$544.1M
Avg. P/E Ratio:	10.9
Avg. Div Yield:	0.0%

Shares of First Solar (FSLR), the largest U.S. solar company, are down fractionally despite an endorsement from Goldman Sachs, which recommends buying the shares, but rival SunPower (SPWRA) is slumping 2% after Goldman advised selling that stock. Neither stock is helping the Solar Stocks Index, which is lower by 1.8%.

Goldman lauded First Solar’s strong balance sheet and robust project pipeline, but voiced concerns that SunPower will not be able to make the necessary cuts to keep pace with slumping module and panel prices in the solar industry, according to Barron’s. Goldman believes the solar sector at large is still a year away from being compelling for investors and that solar stocks could be in for more pain this year and into 2012 due lost government subsidies and reduced tariffs.

Goldman has a $175 price target on First Solar, which is well above where the shares currently trade, but the bank lowered its 2011 EPS estimate on the stock to $9.75 from $10 while maintaining a forecast of $11.50 for 2012. The bank raised its 2013 EPS estimate on First Solar to $13 from $12.50.

Shares of JinkoSolar Holding (JKS) are down 2% despite Goldman raising its rating on that stock to “buy” from “sell.” ReneSola (SOL) is plunging 4% after Goldman cut its rating on that name to “sell” from “neutral.” Yingli Green Energy Hldng (YGE) is down 6% after receiving the same downgrade from Goldman. Trina Solar (TSL) is off 1%, but Goldman reiterated a “buy” rating on the stock today.

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Tags: FSLR, JKS, SOL, SPWRA, TSL, YGE