On Wednesday, TD Cowen maintained its positive stance on First Solar (NASDAQ:FSLR) shares, reiterating an Outperform rating and a price target of $250.00. The firm's assessment followed First Solar's fourth-quarter earnings, which surpassed expectations due to a lower-than-anticipated cost per watt. The company's Average Selling Price (ASP) in its backlog saw a quarter-over-quarter increase, and the ASP on bookings in the past three months indicated support for a higher ASP moving forward.
TD Cowen highlighted that First Solar's guidance for 2024 aligns with the forecasts provided in September, with gross margin benefiting from an anticipated 7% decline in cost per watt. The firm anticipates a positive market reaction to this news, noting that the stock is currently trading at 13 times their 2026 earnings per share estimate, excluding Investment Tax Credit (ITC) benefits from the Inflation Reduction Act (IRA).
The analyst's commentary underscored the company's financial performance, pointing to the increased ASP in the backlog and the supportive bookings as key indicators of First Solar's robust position. Additionally, the expected decrease in production costs is projected to sustain the company's gross margin.
First Solar's stock valuation, according to TD Cowen, is seen as favorable when considering the firm's projections for the company's earnings in the coming years. The analyst's outlook suggests confidence in First Solar's financial trajectory and market performance.
Investors and market watchers will likely monitor First Solar's stock performance in the wake of this reaffirmed Outperform rating and price target, as well as the company's ability to meet its projected financial goals and cost efficiencies.
InvestingPro Insights
First Solar's (NASDAQ:FSLR) recent financial achievements and TD Cowen's positive outlook are echoed by the data and metrics provided by InvestingPro. The company stands on solid financial footing with a market capitalization of $15.49 billion and a healthy Price to Earnings (P/E) ratio of 18.73. This valuation is underpinned by a robust revenue growth of 25.28% over the last twelve months as of Q3 2023, indicating a strong market demand for First Solar's offerings.
InvestingPro Tips highlight the company's robust balance sheet, which holds more cash than debt, and the expectation of net income growth this year. These factors, along with the anticipation of sales growth in the current year, suggest that First Solar is well-positioned for continued financial success. Furthermore, analysts predict that the company will remain profitable this year, a sentiment that supports TD Cowen's optimistic price target.
To delve deeper into First Solar's financial health and gain access to more InvestingPro Tips, such as the company's liquid assets exceeding short term obligations and a strong return over the last five years, investors can visit InvestingPro's detailed analysis. There are 8 additional tips listed on InvestingPro that could provide further insights into First Solar's financial prospects.
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