J.P. Morgan upgraded First Solar (NASDAQ:FSLR) to an Overweight rating (From Neutral) and cut their 12-month price target on the stock to $220.00 (From $239.00) ahead of the alternative energy company’s 3Q earnings release.
“We believe the recent pullback tilts risk-reward favorably,” write analysts at J.P. Morgan as they see FSLR as a company with good visibility into medium-term growth prospects owing to a backlog that stretches into later this decade.
J.P. Morgan maintains their belief in the potential longer-term risks to FSLR resulting from new U.S.-based manufacturing incentivized by IRA domestic content guidelines. However, they consider the current value of the stock to be promising in the short term.
Their confidence is based on the understanding that the general sector has experienced a decline primarily due to the increase in interest rates and concerns over developers' costs and access to capital. Analysts anticipate these factors to have a relatively minor effect on FSLR, given their already established visibility and secured position.
J.P. Morgan expects FSLR to report 3Q EPS of $2.06 on revenue of $875 million, compared to the Street’s estimates of $2.05 and $885 million, respectively.
The company is expected to maintain their 2023 guidance with an EPS range of f $7.00-$8.00 on revenues of $3.4-3.6bn (Street: $7.50/$3,520M).
Shares of FSLR are up 2.07% in pre-market trading Thursday morning.