Analyst Shifts Stance On First Solar, Upgrades To Hold Amid ESG Push

  • GLJ Research has upgraded First Solar Inc FSLR from Sell to Hold with a price target of $157.56.
  • First Solar said in its Q1 earnings conference call that based on the current form factor of its modules, it expects to benefit from approximately $0.17 per watt for each module sold as part of the inflation reduction act. 
  • For the made-in-the-USA modules, FSLR plans to sell in out years, of the $0.23/watt in costs it reported in Q1, due to taxpayer welfare/handouts in the inflation reduction act (IRA), $0.17/watt of that will be paid for by the U.S. government, said the analyst.
  • With solar prices in free-fall due to record excesses, the question is at what price is FSLR at risk of seeing customers renege on its long-term contractsand will we see those pricesin the U.S. marketthis year.
  • The analyst thinks the story of First Solar is still strong and many details around the IRA bill are still unknown to make a clear pitch on growth.
  • The analyst added that the company’s $21.7 billion market cap is making it an easy play for large money-managers who want renewable/solar/ESG exposure.
  • Yet, given the analyst’s view that the solar industry will be plagued by a rerating lower of valuation multiples, while the analyst expects FSLR to outperform its peers, there still is a chance of it ending the year lower.
  • Also Read: Renewables Revolution: US Green Energy Poised for 'Staggering' Growth, According To BloombergNEF Report
  • Price Action: FSLR shares are trading lower by 1.10% at $206.44 on the last check Friday.
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