First Solar Fundamentals Likely To Come Under Pressure In 2023, Analyst Downgrades Stock With 66% Price Target Cut

  • GLJ Research analyst Gordon Johnson downgraded First Solar Inc FSLR from Buy to Sell and lowered the price target from $138.4 to $46.8.
  • FSLR's most recent quarter was nothing short of a disaster across the board, Johnson noted. 
  • Still, FSLR has been among the best-performing solar stocks of 2022, despite its negative FCF for four consecutive quarters amid the best solar module pricing environments since 2011, which the analyst feel is in the process of reversing. 
  • Well, in short, 2022 has been a year defined by "euphoric tall tale optimism," like the passage of Biden's "Build Back Better" bill and every decision on any government policy being deemed by the sell-side a "huge positive." 
  • However, 2023E is a year where FSLR will have to show and prove, aggravated by contracts with flexible pricing (and volumes), likely collapse in poly-Si prices, and heightened competition. The analyst expects FSLR's fundamentals to come under increased pressure through 2023E. 
  • As such, given FSLR has sold off its most profitable divisions and projects, the analyst re-modeled the company's estimates.
  • Price Action: FSLR shares traded lower by 4.03% at $160.40 on the last check Tuesday.
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