Solar panel maker First Solar (FSLR) has largely been subdued so far in the fourth quarter. Solar stocks have had a solid run in 2019. First Solar is up almost 33% year-to-date, notably underperforming peer solar stocks.
First Solar stock: Technical indicators
The stock is currently trading at $56.3, almost 4% above its 50-day moving average level. The stock crossed below this level in September and has traded lower since then. This level close to $54.3 could act as a support for the stock in the short term. FSLR is still trading 6% below its 200-day level, which could concern investors. This level around $59.4 might act as a resistance for the stock going forward.
FSLR stock exhibited a “death cross” pattern last month when its 50-day level crossed below its 200-day level. The pattern indicates a bearish signal for the stock. However, the recent strength in the stock implies that the worst could be behind FSLR stock in the short term as long as it holds the 50-day level.
First Solar stock has fallen almost 20% from its 52-week high of $69.2 in August. And it has surged more than 46% from its 52-week low of $38.4 in December of last year.
FSLR is trading at an RSI (relative strength index) of 67, which indicates that the stock is approaching an overbought zone. An RSI above 70 implies that the stock is overbought while an RSI below 30 implies that the stock is oversold. RSI at extremes implies a probable reversal in the stock’s direction.
First Solar stock is currently trading at 14.5 times its estimated earnings for the next 12 months. This looks to be trading at a discount compared to its historical average, which is well above 20x. Based on analysts’ estimates, First Solar is estimated to report earnings of $3.52 per share in 2020, which implies more than 50% growth year-over-year. Thus, the stock looks attractively valued given such big growth potential.
First Solar returned to profits in Q3 2019 after a steep loss in the second quarter. For 2019, the company is expected to report earnings of $2.32 per share, based on estimates. This represents a growth of 70% year-over-year.
Peer SunPower (SPWR) is currently trading 50 times its next year’s earnings. The stock looks to be trading at a premium. It has surged approximately 60% so far this year.
To find out more about how solar stocks are performing, read Solar Stocks: Analyzing the Top Gainers of 2019.
Analyst price targets
First Solar stock offers a handsome upside potential of 26% for the next 12 months. Analysts have given it a mean target price of $70.9 against its current market price of $56.3.
Among the 16 analysts covering FSLR, eight recommended a “buy,” three recommended a “strong buy,” and five recommended a “hold.” None of them recommended a “sell” as of December 18.
SunPower stock has a mean target price of approximately 16% based on analysts’ mean target price of $8.96. It is currently trading at $7.89.