Shares of First Solar Inc. fell in premarket trading Friday after an analyst lowered his rating on the solar panel maker, citing continued declines in average selling prices, credit market constraints and a weak economy that has prompted businesses to recoil from spending on solar projects.
Shares fell $2.62, or nearly 2 percent, to $147.77 in premarket dealings on Friday.
Collins Stewart analyst Dan Ries said that despite news on Thursday that China may unleash new subsidies for solar power installations, the solar industry remains challenging.
"We do not believe the program in China will meaningfully alter the demand for First Solar product or correct the polysilicon oversupply situation we forecast for 2009 and 2010," Ries said, as he downgraded the company to "Hold" from "Buy."
Ries assigned First Solar a price target of $150.39.
Solar stocks had jumped Thursday on news of China's potential solar subsidies, which Piper Jaffray analyst Jesse Pichel said entailed a proposal for a subsidy that he said may cover more than 60 percent of the cost to install the large solar panel system.
