© Reuters. First Solar’s (FSLR) Stock Shines After Announcing $1 Billion Revolving Credit Facility
Shares of First Solar (NASDAQ:) climbed Friday after the company announced that it entered into a five-year revolving credit and guarantee facility for $1 billion.
J.P. Morgan Chase Bank acted as lead arranger and is administrative agent for the facility, and 10 other banks participated. The facility includes up to $250 million which is available for the issuance of letters of credit.
“This agreement underscores First Solar’s bankability and is underpinned by the strong fundamentals that drive our business today,” said Mark Widmar, First Solar’s CEO.
Shares of the Arizona-based solar company were also boosted by a price target increase and positive comments from analysts at Guggenheim. Analysts there reiterated their Buy recommendation on First Solar and raised their price target to $334 from $277.
Commenting on the change, analysts said, “First Solar’s recent stock price underperformance appears to have been driven by several factors, including falling prices from Chinese competitors, the potential for shifts in the policy environment, and worries about a potential equity offering. The latter point has been taken off the table following FSLR’s announcement of a new revolving loan facility yesterday, and we believe concerns regarding the other two issues are overblown.”
They added, “Even applying very conservative valuation criteria, the stock appears significantly undervalued based on our analysis.”
Shares of First Solar climbed by over 5% Friday morning. The stock trades at $193, up about 30% this year but well off the May high of $232.
