First Solar Might Face Tough Time As Polysilicon Prices Fall
BUSINESS INSIDER - First Solar (FSLR) is overvalued and faces a serious problem in the form of cheap polysilicon. Sound familiar? It should, it's been the refrain from analysts since May.
Today's shot at First Solar comes from Gordon Johnson of Hapoalim Securities, on Tech Ticker.
Johnson says First Solar is a sell, with a target of $90. His argument trods well worn ground, but in case you missed it, here it is.
First Solar makes its panels out of cadmium telluride. Most of its competitors make panels out of polysilicon. Last summer, thanks to generous subsidies around the world, especially in Spain, the price of polysilicon shot up to $450 per kg. At such a high price, First Solar had an advantage on the competition.
However, the price has crashed to $60 per kg, and might fall even further, thus wiping out First Solar's advantage. First Solar had told investors not to worry, that it could compete with lowered polysilicon prices.
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