Ahead of the Bell: FBR upgrades First Solar

First Solar shares rose $10.68, or 7.4 percent, to $154.65 in premarket electronic trading, having closed Monday at $143.97. The stock is still worth about half of what it traded at in May.

Analyst Mehdi Hosseini upgraded First Solar to "Market Perform" from "Underperform," noting the stock has pulled well below his $210 price target.

President Bush earlier this month signed an eight-year extension of solar energy tax credits which lifted an exemption that had prevented utilities from taking advantage of the incentives. Hosseini said that change could provide better economics for First Solar than selling to third-party power purchase agreement owners or financing its own power purchase agreements.

But Hosseini cautioned that in order to become aggressive on the stock, he'd need to assess the impact of the current credit crisis on solar project funding and size up competition from thin film solar companies. He added that First Solar has yet to announce the site of its next manufacturing facility, and noted that the U.S. market is still in early stages of development.