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First Solar cut to Sell at UBS, as cash burn to continue into 2018

Published 11/18/2016, 10:45 AM
First Solar cut to Sell at UBS, as cash burn to continue into 2018
FSLR
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  • First Solar (FSLR -4.4%) is now ~9% lower since Wednesday's release of disappointing 2017 guidance (I, II, III), and UBS sees further risk to expectations in 2018 and beyond as it downgrades shares to Sell from Neutral with a $25 price target, cut from $45.
  • UBS cautions that "cash burn likely [will] continue into 2018 with limited cash generation from system sales, more than offset with continued need to scale capex on full 3GW Series 6 deployment of a further $500M," and expects cash generation to remain modest in 2018 and beyond.
  • With 2017 EPS guidance below expectations at $0-$0.50 and a meaningful improvement expected thereafter, UBS expects "another step-change down... we see risk should margins trend lower and/or system opportunities continue to trend below guided volume expectations."


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