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First Solar shares retain Outperform rating on demand growth

EditorAhmed Abdulazez Abdulkadir
Published 06/12/2024, 07:42 AM

On Wednesday, Oppenheimer adjusted its outlook on First Solar (NASDAQ:FSLR), raising the price target to $325 from the previous $271 while maintaining an Outperform rating. The revision follows discussions with First Solar's CFO, Alex Bradley, who highlighted factors supporting the company's pricing and demand.

During an investor call, Bradley pointed to stable pricing as a result of clear domestic content guidelines and the initial ruling on its International Trade Commission (ITC) case. First Solar has observed increased demand, particularly from projects associated with large data center operators, known as hyperscalers, and from longstanding corporate clients seeking domestic solar equipment.

The company's ongoing efforts to expand its manufacturing capabilities are expected to lead to improved pricing and margins. This is attributed to a mix of factors, including the use of non-U.S. modules in U.S. projects, better conversion efficiency of its solar panels, and rising underlying power prices.

Oppenheimer's raised price target reflects the anticipation of enhanced operating leverage for First Solar. The firm foresees the potential for the solar company to outperform expectations due to these positive market dynamics and internal improvements.

In other recent news, First Solar has seen a flurry of activity from financial analysts. Baird maintained an Outperform rating on First Solar and raised the price target to $344, citing the company's superior economics and technology differentiation. Goldman Sachs and BMO Capital also increased their price targets for First Solar to $302 and $311 respectively, with both firms maintaining positive ratings.

In addition, the U.S. International Trade Commission has initiated an investigation into solar panel imports from Southeast Asian countries, following a petition by U.S. manufacturers including First Solar. This could potentially impact the cost of solar panels in the U.S. market.

First Solar has also registered products under the EPEAT environmental rating system, a preferred choice for U.S. government procurement. This aligns with the Biden administration's mandate to prioritize sustainable products and could position First Solar as a preferred supplier for federal projects.

InvestingPro Insights

First Solar's (NASDAQ:FSLR) recent developments and market performance have caught the eye of investors and analysts alike. With an impressive Market Cap of $31.53 billion and a Revenue Growth of 27.28% over the last twelve months as of Q1 2024, the company stands out in the solar energy sector. The growth is further underscored by a substantial quarterly revenue increase of 44.83% in Q1 2024. These figures reflect First Solar's robust operational foundation and potential for continued expansion.

An InvestingPro Tip worth noting is that First Solar holds more cash than debt on its balance sheet, which is a strong indicator of financial health and provides flexibility for future investments and operations. Additionally, the company is trading near its 52-week high, with the price at 99.98% of this peak, signaling market confidence in its performance and growth prospects.

For those looking to delve deeper into First Solar's financials and future outlook, InvestingPro offers an array of additional tips. Currently, there are 17 more InvestingPro Tips available, which can further guide investment decisions. Interested readers can access these insights and benefit from a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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