JPMorgan Adding Coverage of First Solar

Analyst Chris Blansett adds First Solar to His Coverage

Solar Energy : Shuffling The Deck--Adding First Solar To Our Coverage Universe, Downgrading Companies Late To The Game, Introducing Price Targets - In light of the addition of First Solar to our coverage universe, continued decline of oil prices & associated waning of investor interest & continued deterioration of the overall macro environment, we are shuffling our group ratings to incorporate the addition of the industry's cost/watt leader & our recommendation of a flight to safety by investors. In addition we are introducing our Dec 31, 2009 price targets. OW First Solar/SunPower- Companies With Strong Balance Sheets & Are FCF Positive Appear More Prudent Investments At This Time as we expect they can reign in capex in order remain FCF positive in light of our view of a tough market ahead. Downgrading Evergreen Solar/Ascent Solar--Players Late To The Game Are Going To Have A Rough Time in our view given the reduced solar subsidies next year, higher solar system borrowing costs & increased competition at all levels of the solar PV foodchain all of which will cause solar component pricing pressure.

First Solar, Inc. : Cost Leadership And Solid Execution Appear A Hard Combination To Beat, Initiating With An OW Rating - We are inititiating coverage on First Solar with an OW rating and Dec 31, 2009 price target of $102. First Solar is the solar module cost leader with its Cadmium Telluride cell technology and can produce modules at a cost/watt basis that is less than ½ the industry average. Although we believe solar system & associated component prices will decline 25%+ in C09, we also believe First Solar will be able to weather ASP declines with its margin structure intact given its below market pricing strategy. As a result, we consider FSLR a relatively safe haven amongst solar energy stocks given our view of declining profitability for the solar industry going forward.