First Solar Hits 52-Week High: What's Driving The Stock?

Shares of First Solar, Inc. (NASDAQ:FSLR) hit a 52-week high of $51.84 on Sep 15, eventually closing at $50.45. The company returned 46.6% in the past one-year period. The average volume of shares traded over the last three months was roughly 2.1 million.

What is Driving First Solar?

Shares of First Solar have rallied nearly 4.2% in the last trading session. The rally came following the upgradation of its rating by one of the leading financial institutions. The price target of First Solar was also raised to $65 from $50.

First Solar continues to work on photovoltaic technology and its advanced thin film solar modules have set the industry benchmark with over 10 gigawatts (GW) installed worldwide. Notably, it generates 8% more energy than conventional solar modules. During the last quarter, the company’s bookings of 1.5 GW were geographically diversified, with solid demand witnessed in India, Asia-Pacific and Europe, outside of the United States.

The U.S Energy Information & Administration (EIA) expects total utility-scale solar capacity to increase to 29 GW by the end of 2017 and to 33 GW by the end of 2018. The expected rise in demand for solar energy will provide more opportunity for First Solar.

First Solar has recently increased focus in the growing Indian solar market, among foreign nations. Its committed to developing a capacity of 5 GW by 2019 to support India’s plan of installing 100 GW of solar electricity by 2022. India’s goal to ramp up its solar market is likely to benefit the company at large, under the Batch 1 phase II of the National Solar Mission.

The company made a strategic decision in November 2016 to phase out Series 4 solar module production by 2018 and replacing it with series 6. Going ahead, it expects to produce 2.3 GW of solar modules during 2017, as it successfully ramps down production of Series 4 modules and converts to production of Series 6.

Given the better pricing environment, and increased demand, it is quite likely that First Solar may launch series 6 modules earlier than expected. The company has so far been a steady performer and is gaining momentum with the expected increasing demand for solar energy in the United States and globally. We can expect the company to perform well in the long run with solid global stronghold and product innovation efforts, given the increased demand.

Zacks Rank & Key Stocks

First Solar currently carries a Zacks Rank #3 (Hold). Investors can consider a better-ranked stock from the same space such as JA Solar Holdings, Co., Ltd. (NASDAQ:JASO) and SolarEdge Technologies, Inc. (NASDAQ:SEDG) and SunPower Corporation (NASDAQ:SPWR) . While JA Solar and SolarEdge sport a Zacks #1 Rank (Strong Buy), SunPower carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SunPower delivered an average earnings surprise of 29.2% in the trailing four quarters. Its 2017 estimates have narrowed by 4.3% to a loss of 88 cents in the last 90 days.

JA Solar delivered an average surprise of 716.7% in the trailing four quarters. Its 2017 estimates have risen by 6000% to 61 cents per share in the last 90 days.

SolarEdge delivered an average surprise of 21.7% in the trailing four quarters. Its 2017 estimates have risen by 32.4% to $1.88 per share in the last 90 days.

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