First Solar Shares Could Climb 25% in 12 Months

According to Collins Stewart new price target of $160 on First Solar, Inc. (NASDAQ:FSLR) shares, they expect a 25% return in the next 12 months when considering Friday's close of $129.62.

Collins Stewart upgraded First Solar from Hold to Buy and price target set to $160 on Friday.  First Solar continues to carry a high short interest, 15% according to shortsqueeze.com and 25.9% of the float listed at finviz.com.

(StreetInsider.com) Collins Stewart notes that its downgrade in March on FSLR was "due to concerns that its CY10 EPS was at risk due to impending module price cuts and its significant valuation premium at the time." With the Street's estimates for next year coming down, in addition to a narrowing valuation premium, however, Collins Stewart believes that the stock's risk/reward is now more favorable. The firm also points out that "pricing pressures in the solar market have eased in the recent months..."

Collins Stewart raised its average selling price estimates for Q4 from $1.66/watt to $1.68/w, its CY10 estimate from $1.44/w to $1.50/w and its CY11 estimate from $1.17/w to $1.25/w. Looking at earnings, the firm moves its CY10 EPS estimate from $6.00 to $6.50 and its CY11 forecast from $6.00 to $7.25.

Go Solar, place your bets and caution to the shorts.

Disclaimer: No positions in any of the securities mentioned in this publication.