On Wednesday, Susquehanna maintained a Positive rating on First Solar (NASDAQ:FSLR) and increased the shares target to $285 from $258. The adjustment comes ahead of the company's second quarter earnings report.
Susquehanna anticipates First Solar will continue to benefit from strong average selling prices (ASPs) due to recent policy changes, including the removal of the bifacial exemption and the start of a new anti-dumping/countervailing duty (AD/CVD) investigation. These developments are expected to support higher pricing for First Solar’s domestic-content-eligible panels.
The firm also notes that the current political environment and the growth in electricity demand could pave the way for First Solar to expand its manufacturing capabilities. This potential expansion is contingent on the continuation of incentives provided by the Inflation Reduction Act (IRA) after the upcoming election.
While it is not the primary assumption in their analysis, Susquehanna suggests that a new factory with a capacity of over 3 gigawatts could significantly enhance First Solar's earnings before interest, taxes, depreciation, and amortization (EBITDA) by approximately $250-$300 million, or roughly 13% by the year 2027, not accounting for tax credits.
The report reflects a positive outlook for First Solar, indicating that policy shifts and market conditions could offer substantial benefits to the company's financial performance. The revised price target of $285 represents Susquehanna's confidence in the company's ability to leverage these advantages and sustain its positive trajectory in the competitive solar energy market.
In other recent news, First Solar has been the subject of several key developments. Baird lowered First Solar's share price target to $307, aligning with the company's average selling price and cost per watt guidance. Despite this, Baird's outlook remains positive, citing strong demand and an advantageous position in the market.
Meanwhile, Deutsche Bank raised First Solar's stock target to $280 based on estimated 2025 earnings per share, maintaining its Buy rating. Wells Fargo and Oppenheimer also retained their Overweight and Outperform ratings respectively, highlighting a rise in market prices and increased demand.
BMO Capital and Goldman Sachs, too, raised their price targets for First Solar's stock. Additionally, the U.S. International Trade Commission initiated an investigation into solar panel imports from Southeast Asian countries, which could potentially impact the cost of solar panels in the U.S. market.
Lastly, First Solar's products have been registered under the EPEAT environmental rating system, aligning with the Biden administration's mandate to prioritize sustainable products. These recent developments underscore First Solar's strategic positioning within the evolving landscape of the solar energy market.
InvestingPro Insights
As First Solar (NASDAQ:FSLR) gears up for its upcoming earnings report, recent data from InvestingPro underscores the company’s robust financial health and market position. With a market capitalization of $23.2 billion and a healthy P/E ratio of 22.72, First Solar is standing strong in the competitive solar energy sector. The company's financial performance is further evidenced by a substantial revenue growth of 27.28% over the last twelve months as of Q1 2024, reflecting the positive impact of policy changes and market dynamics highlighted by Susquehanna.
InvestingPro Tips also reveal that First Solar holds more cash than debt on its balance sheet, a testament to its solid liquidity position. Additionally, analysts are optimistic about the company’s sales growth in the current year, aligning with Susquehanna’s positive outlook. While the stock has experienced volatility with a significant hit over the last week and month, its long-term prospects are promising with a strong return over the last three months and a considerable price uptick over the last six months.
For those interested in a deeper analysis, InvestingPro offers additional tips on First Solar, including insights into earnings revisions and profitability predictions. To access these and more, visit https://www.investing.com/pro/FSLR and consider using the promo code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With a total of 11 additional InvestingPro Tips available, investors can gain a comprehensive understanding of First Solar’s potential and make informed decisions.
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