Ahead of the Bell: First Solar declines on downgrade

On Wednesday, the Tempe, Ariz., company reported a ninefold jump in its first-quarter profit, and said sales more than doubled. Both totals were greater than analysts expected, and the stock rose 2.5 percent, coming close to an all-time high, and closing at $291.99.

Although he said the quarterly results were good, ThinkPanmure analyst Jonathan Hoopes downgraded the stock to "Accumulate" from "Buy." He expects greater competition from rivals and from companies developing newer solar technologies, and expressed concern about First Solar increasing production capacity above its long-term contracted orders. While the company may benefit by charging higher prices in the current market, which is experiencing a polysilicon shortage, Hoopes said as the supply stablizes in the next year and a half, production that outpaces contracts may result in First Solar being forced to reduce prices in the long term.

Hooper raised his price target to $340 per share from $310, implying he expects the stock to rise about 16 percent in the next 12 months. That potential gain does not meet the 20 percent expected increase that garners a "Buy" rating under ThinkPanmure's rating system.

Shares fell $5.99, or 2.1 percent, to $286 in premarket electronic trading. The stock has traded between $54.20 and $308.24 in the last year.