FSLR – While market expectations for FLSR are currently pessimistic, management is confident about a number of operational tailwinds, suggesting longer-term upside is warranted

• First Solar, Inc. (FSLR:USA)currently trades near recent averages relative to UAFRS-based (Uniform) Assets, with a 0.9x UAFRS-based P/B. At these levels, the market has muted expectations for the firm, but management is confident in their differentiated strategy, outlook for operating income and ITC extension
• Specifically, management is confident in their ability to pursue a differentiated strategy that can lead to capturing value and compelling returns. Additionally, they are confident in their outlook for operating income, and that their ITC extension may delay some of the utility ownership of solar, leading to a more optimal capital structure. Furthermore, they are confident that the reduction of approximately 200 megawatts to the full year Series 6 production plan was only due to their revaluation of their back-end processes. Given potential operational and market tailwinds, and the firm’s leadership position in the space, longer-term upside remains warranted