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First Solar stock plunges 17% to 3-month low

February 27, 2013: 1:38 PM ET
First Solar, stock

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Shares of First Solar plunged 17% Wednesday to their lowest level in three months after the company delivered disappointing fourth-quarter sales figures and a weak outlook for the first quarter.

First Solar (FSLR) reported revenue of $1.1 billion for the last three months of 2012, falling short of the $1.3 billion that analysts were expecting. For the first quarter, the solar panel maker expects to earn between 70 cents and 90 cents per share on revenue of $650 million to $750 million. Analysts were expecting the company to earn 89 cents per share on revenue of $867 million for the current quarter.

First Solar's intraday drop is the steepest since Aug. 30. Shares of fellow solar panel maker SunPower (SPWR) also declined sharply.

The downbeat results sparked Wall Street analysts to downgrade the stock and cut price targets. The company's results were also a hot topic among traders on StockTwits.

I just dont get investors/traders fascination with the sun. Golfers I understand. $FSLR (no positions)

Even with that fascination, companies trying to capitalize on the power of the sun have struggled in recent years as competition heats up in China, where solar panels can be manufactured more cheaply.

BofA/Merrill Lynch Downgrades First Solar ($FSLR) to Underperform

Bank of America's Joe Osha also cut his price target to $25 per share from $35. That's nowhere near a resounding endorsement for a stock trading at just above $26. It's closer to its 52-week low than its 52-week high at this point.

$RJF Analyst Pavel Molchanov repeates "SELL" $FSLR. his success ratio since 2009 is 48% so i wouldnt count on him:

"While the balance sheet is healthy, and the company has stayed profitable thanks to its legacy U.S. utility-scale projects, as those gradually roll off we envision progressively lower levels of profitability," said Molchanov in his note to clients. "We maintain our Underperform rating, a negative stance on par with the three other module makers we cover: SunPower, Suntech (STP), and Trina (TSL)."

I do not own, but if $FSLR hits the mid-point of Q1 2013 estimates at 0.80 EPS, they are now trading at a 5.53 forward P/E ratio.

That's a pretty cheap P/E but depends if you're willing to take a chance on a stock that has cooled off considerably over the past year.

$FSLR With multiple downgrades and price target of $25 I am not sure 22 is safe

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Hibah Yousuf
Hibah Yousuf
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Hibah Yousuf is a reporter at CNNMoney, where she covers stocks, bonds, commodities and currencies trading across the globe, as well as corporate earnings and other markets-related news. Prior to joining the site in 2009, she interned at Money Magazine.

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