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On Tuesday, BofA Securities made adjustments to its outlook on First Solar (NASDAQ:FSLR) shares, reducing the price target to $215 from the previous $236, while continuing to endorse the stock with a Buy rating. The decision comes amidst a changing landscape for solar manufacturing and trade. According to InvestingPro analysis, First Solar's stock, currently trading at $130.05, appears undervalued despite falling 42% over the past six months. The company maintains a "GREAT" financial health score of 3.21, supported by strong fundamentals.
The analysis by BofA Securities highlights the strategic advantage that First Solar's U.S. manufacturing operations provide in the face of increasing trade barriers. The recent imposition of anti-dumping and countervailing duties (AD/CVD) has resulted in a significant increase in costs for Southeast Asian TOPCon imports, which have risen from approximately $0.22–$0.23 per watt to over $0.37 per watt. This change has led to higher pricing in the U.S. market, now around $0.27 per watt. The company's strong market position is reflected in its impressive 26.75% revenue growth and attractive P/E ratio of 10.84. InvestingPro subscribers can access 8 additional key insights about First Solar's competitive advantages in their comprehensive Pro Research Report.
First Solar's American-made products, with average selling prices (ASPs) ranging from $0.30 to $0.32 per watt, continue to gain from domestic content premiums. The firm's competitive position is seen as strengthening due to a combination of previous tariffs under the Trump administration, new AD/CVD measures, and limited offshore capacity, particularly for solar cells.
The report also notes that fears over the Foreign Emergency Economic Powers Act (FEOC) are hindering the development of new U.S. cell manufacturing facilities, which in turn benefits First Solar by fortifying its market position. BofA Securities underlines First Solar's strong standing as trade dynamics evolve, maintaining a positive outlook on the company's stock despite the lowered price target.
In other recent news, First Solar has been the focus of several analyst updates and strategic developments. BMO Capital Markets reiterated an Outperform rating with a $230 price target, citing potential benefits from tariffs on solar imports, despite some near-term margin pressures. Barclays (LON:BARC) also maintained an Overweight rating with a $236 target, noting the impact of tariffs on First Solar's import operations and potential financial implications. Truist Securities adjusted its price target from $285 to $245, maintaining a Buy rating and expressing optimism about the company's prospects under the Inflation Reduction Act's domestic content requirements. Jefferies slightly increased its price target to $202, maintaining a Buy rating and noting expected margin pressures in the short term.
In addition to analyst updates, First Solar has partnered with Everstream Analytics to enhance its supply chain resilience. This collaboration aims to provide First Solar with advanced risk management tools to address potential disruptions. The partnership is part of First Solar's ongoing efforts to improve its supply chain transparency and operational agility. Investors are closely monitoring these developments, as First Solar continues to navigate the evolving regulatory and market landscape.
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