Why First Solar Gets Upgrade, Despite Recent Selloff

Despite a positive earnings update for the first quarter, First Solar, Inc’s FSLR stock Friday plummeted 8.9%, possibly on investor concerns around “shipping and logistics headwinds as well as long-term tech concerns," according to BofA Securities.

The First Solar Analyst: Julien Dumoulin-Smith upgraded the rating for First Solar from Neutral to Buy, while maintaining the price target at $91.

The First Solar Thesis: The company’s first-quarter earnings call indicated an improved outlook for average selling prices and Series 6 CuRe demand, as well as a less volatile cost structure, Dumoulin-Smith said in an upgrade note.

“On balance, the medium-term update was one of the best we've seen of late in terms of panel pricing outlook. This should sizably offset both near term '21 pressures and provides a bridge to an LT outlook to next-gen panel technology,” he added.

“As an additional tailwind, we expect greater details around the Biden Infra package, particularly given the Biden admin inclusion of an ‘American Made’ focus in the package, as likely to drive elevated investor sentiment for FSLR,” the analyst further wrote.

FSLR Price Action: Shares are down 1.12% at $75.59 at the time of publication Monday afternoon.

(Photo: First Solar video)