Moreover, the deal is perceived as a boost for the broader renewable energy sector. It reflects confidence in the market for IRA-related credits extending into 2025, despite potential political shifts. Want deeper insights? InvestingPro analysis indicates First Solar (NASDAQ:FSLR) is currently undervalued, with 7 additional exclusive ProTips available for subscribers.
The analyst remains positive on First Solar, citing strong demand for utility-scale solar and the company's adeptness in adapting to changing political environments, supported by its robust earnings per share of $11.67 over the last twelve months.
The analyst noted that First Solar has been at the forefront of the transferability market for IRA-related tax credits and consistently secures top-tier pricing agreements. With a strong current ratio of 2.14 and operating with minimal debt at just 9% debt-to-equity, First Solar maintains significant financial flexibility.
The transaction with Visa (NYSE:V) is slightly more discounted than the December 2023 agreement with Fiserv Inc (NYSE:FI)., which was at a 4% discount, indicating a slight increase in supply relative to demand in the market.
The transaction is seen as a positive indicator for other companies in the analyst's coverage that are accumulating IRA credits. These companies, including Enphase Energy (NASDAQ:ENPH), Sunrun (NASDAQ:RUN), Array Technologies (NASDAQ:ARRY), and Canadian Solar (NASDAQ:CSIQ), are expected to be able to monetize these credits effectively at reasonable prices.
Moreover, the deal is perceived as a boost for the broader renewable energy sector. It reflects confidence in the market for IRA-related credits extending into 2025, despite potential political shifts. Want deeper insights? InvestingPro analysis indicates First Solar is currently undervalued, with 7 additional exclusive ProTips available for subscribers. The analyst remains positive on First Solar, citing strong demand for utility-scale solar and the company's adeptness in adapting to changing political environments, supported by its robust earnings per share of $11.67 over the last twelve months.
In other recent news, First Solar has been the subject of several significant developments. The company disclosed its Q3 2024 financial results, revealing record production levels and a significant backlog of orders, despite operational challenges and market competition. First Solar's earnings per share stood at $2.91, despite a $50 million warranty charge for Series 7 products. However, due to operational challenges and market conditions, First Solar revised its net sales projections for 2024 to $4.1 billion to $4.25 billion.
Analyst firms Roth/MKM and RBC Capital have maintained their Buy and Outperform ratings on First Solar, respectively, with price targets of $280 and $315. These ratings follow the U.S. Department of Commerce's preliminary affirmative determinations in the antidumping duty investigations, which could potentially reduce competition from foreign solar product manufacturers. Piper Sandler also raised the price target on First Solar to $250, maintaining an Overweight rating.
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