JP Morgan Downgrades Solar Names (FSLR, ESLR, ENER), Sees Better Opportunity In LED, Wind Energy

JP Morgan is out with a bearish call on solars this morning downgrading First Solar (FSLR) and Energy Conversion Devices (ENER) to Underweight and initiating coverage on Evergreen Solar (ESLR) with a Neutral.

Notable calls has all the details on the call, but here are some highlights:

- JP Morgan reiterates the same old concerns of supply and margin headwinds
- they like LED and wind energy better right now
- German tariff reset will decrease demand in 2nd half of year
- oversupply will become a problem as companies race to expand market share
- sees module ASPs contraction of 20% or more driving margin compression
- another German subsidy cut on Jan 1, 2011 pressuring demand further

Here are some analyst comments specific to First Solar (FSLR):

- the firm notes all the negativity surrounding the stock but feels investors are too comfortable with an EPS of $6 this year.  They see very little margin for error in these estimates  and see much bigger risk in those estimates
- they are lowering the price target from $140 to $85

FSLR, ESLR and ENER are all down a few percent  this morning.

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