"Photovoltaic ambition" of Tesla, Inc. becomes a "nightmare" as First Solar (FSLR.US) stock price plunges 10% after being downgraded by BMO.

First Solar (FSLR.US) plummeted by 10.2% in US stock trading on Thursday, after BMO Capital Markets downgraded its stock rating from "outperform the market" to "in line with the market", and lowered its target price from $285 to $263. The institution pointed out that the potential competitive threat from additional manufacturing capacity from local CECEP Solar Energy could continue to suppress the company's stock price. As of the time of writing, the stock continued to decline in after-hours trading, falling by 2.7%. BMO analyst Amit Takaar stated that he initially viewed Tesla, Inc.'s CEO Elon Musk's comments last week at Davos about the possibility of building a large vertical integrated solar panel manufacturing facility for self-sufficiency as a "grand vision", but Musk's statements during this week's Tesla, Inc. earnings call indicate that "this is likely to become a formalized plan in the coming quarters and could put pressure on First Solar's stock price for a while." The timing, pace of progress, and how much excess CECEP Solar Energy component capacity Tesla, Inc. will ultimately need to sell to entities outside of its factory remains uncertain. However, Takaar noted in the report: "Tesla, Inc.'s past success in rapidly scaling up manufacturing capacity in the US for Clean Energy Fuels Corp. (such as energy storage systems, inverters) adds to the risks faced by First Solar in terms of competition." Takaar's analysis suggests that even if only a portion of Tesla, Inc.'s planned 100 gigawatts of manufacturing capacity is opened up to third parties, it could have negative implications for long-term component pricing, or at least be seen as potential bearish pressure hanging over First Solar's stock price.