“We recommend investors add to positions in front of First Solar’s Q1 report on the back of 5N’s results,” the firm said in a statement. “With the political backdrop improving for solar stocks in general, reduced near-term execution risk and likely upside to our estimates, we are adding First Solar to our Best Ideas list and reiterate our BUY rating and $325 price target.”

First Solar’s shares closed Friday at $268.30, down $2.90 a share, or 1.07%. The stock is trading only 8% below its 52-week high of $291.49.

From a Hot IPO to a Reliable Rebound

LDK Solar Company Ltd. (LDK), which debuted on the New York Stock Exchange last summer, grabbed the spotlight when it climbed 140% in its first four months of trading. But, as of March 12, the stock had plummeted 72% from its 52 week high.

The shares have rebounded in recent weeks – soaring 54% since March 12 – and closed Friday at $32.35 each. That’s still well below its 52-week high of $76.75, but some recent positive developments indicate that LDK will continue its resurgence.

The company just announced the signing of three new contracts, including a 10-year pact with Moser Baer Photo Voltaic, a division of Moser Baer India Ltd., which calls for the sale and delivery of high-quality, multi-crystalline silicon wafers necessary in the production of PV cells that are capable of generating 640 megawatts (MW) of solar power.

LDK will also provide Silcio S.A. with 50 MW of silicon wafers over the next 6 years, and Arise Corporation of Canada 33 MW of silicon wafers between 2008 and 2011.

And LDK is pushing to expand. It expects to complete a brand-new silicon plant with a 1,000-ton production capacity this summer. And another plant with a production capacity of 15,000 tons per year is set to come online some time next year. In addition to the $1.2 billion the company expects to spend on the new plants, LDK will spend another $600 million to expand its wafer production in the next year.

Chief Financial Officer Jack Lai said at a recent conference that LDK would finance the bulk of its ambitions growth plans through cash from operations. That includes expected net profits of $200 million in 2008 and $400 million in 2009. An additional $1 billion will come from customer deposits for long-term wafer contracts, he said.

LDK will finance the rest by issuing $400 million in convertible notes. The notes will pay cash interest semiannually at a rate of 4.75% a year, and in certain circumstances will be convertible into the company’s American depositary shares.

LDK said last week it expects higher revenue but lower profit than initially forecast. The company expects earnings per share to come in between 40 cents and 44 cents, down a penny from its previous prediction. However, LDK raised its revenue outlook by $15 million to a range of $225 million to $235 million.

There’s a strong possibility that LDK shares could get a boost from upgrades from Wall Street in the near future. Four of the six analyst ratings for LDK are a “Hold” or worse, according to Zacks Investment Research. Any upgrades or new coverage based on the company’s positive news could push the share price up even more.

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