On Wednesday, Deutsche Bank maintained its Buy rating on First Solar (NASDAQ:FSLR) and increased the price target to $210 from $205. The adjustment follows the company's fourth-quarter earnings release, which revealed an adjusted earnings per share (EPS) of $3.25, slightly surpassing the expected $3.15. The analyst noted that the results met expectations without any significant surprises.
The improved financial performance was attributed to higher margins, although this was somewhat offset by lower revenues. Looking ahead, First Solar provided a strong outlook for 2024, with adjusted EPS guidance of $13 to $14, aligning with market and buyside expectations. This forecast was consistent with insights from the company's analyst day in September 2023, which detailed its growth strategies.
First Solar's growth is anticipated to be robust, driven by increased production capacity, including a ramp-up in India and the construction of two new facilities in the United States.
The company's financials are also positively influenced by the Section 45x credit, and management expressed confidence in the lead-up to the U.S. presidential election, which could potentially alter solar incentives.
The analyst believes that First Solar's projected growth of approximately 30% in the coming years is appealing to investors. The company's focus on utility-scale projects is seen as a differentiator, insulating it from challenges faced by other players in the solar industry.
Moreover, First Solar's strong balance sheet is considered an advantage in mitigating macroeconomic headwinds. The price target is based on a 15.0x price-to-earnings (P/E) multiple for the year 2024, which remains unchanged.
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