Wall Street Analysts Think First Solar (FSLR) Is a Good Investment: Is It?

Core Viewpoint - The average brokerage recommendation (ABR) for First Solar (FSLR) is 1.46, indicating a consensus between Strong Buy and Buy, based on recommendations from 34 brokerage firms [2] Group 1: Brokerage Recommendations - Of the 34 recommendations, 26 are Strong Buy and 2 are Buy, accounting for 76.5% and 5.9% of all recommendations respectively [2] - Despite the positive ABR, relying solely on brokerage recommendations may not be advisable, as studies show they often fail to guide investors effectively [5][10] - Brokerage analysts tend to exhibit a strong positive bias due to their firms' vested interests, leading to a disproportionate number of favorable ratings [6][10] Group 2: Zacks Rank vs. ABR - Zacks Rank is a proprietary stock rating tool that categorizes stocks from Strong Buy to Strong Sell, based on earnings estimate revisions, and is considered a more reliable indicator of near-term stock performance [8][11] - The ABR is based solely on brokerage recommendations and may not be up-to-date, while Zacks Rank reflects timely earnings estimate revisions [9][12] - The Zacks Consensus Estimate for First Solar has declined by 21.6% over the past month, leading to a Zacks Rank of 5 (Strong Sell) for the company [13][14] Group 3: Investment Implications - The significant decline in earnings estimates and the resulting Zacks Rank suggest that the positive ABR for First Solar should be approached with caution [14]