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Investing.com - RBC Capital has raised its price target on First Solar (NASDAQ:FSLR) to $200.00 from $188.00 while maintaining an Outperform rating on the solar manufacturer’s shares. The stock, currently trading at a P/E ratio of 13.78 and showing strong momentum with a 9.5% gain last week, appears undervalued according to InvestingPro Fair Value analysis.
The price target increase reflects RBC’s view that the One Big Beautiful Bill (OBBB) creates positive implications for both near-term and potentially long-term demand for First Solar as developers accelerate development ahead of the Investment Tax Credit ( ITC (NSE:ITC)) termination and to avoid potential excise tax penalties. The company’s strong financial position, with revenue growth of 19.42% and healthy liquidity metrics, positions it well to capitalize on these opportunities. Discover more detailed insights and 10+ additional ProTips with InvestingPro.
RBC Capital believes First Solar is "uniquely positioned" to accommodate this increased demand due to its 100% U.S. supply chain, which provides the company with a competitive advantage under the Foreign Entity of Concern (FEOC) restrictions included in the legislation.
The firm notes that a pull-forward in demand could help prove price dynamics, alleviate supply/demand imbalance challenges, and provide additional visibility into First Solar’s business beyond 2027.
The revised price target is based on updated estimates and a new valuation methodology, according to RBC Capital’s analysis.
In other recent news, First Solar has been the focus of multiple analyst reports and legislative developments. Jefferies raised its price target for First Solar to $157, highlighting the potential impacts of the House bill, which could increase demand for its modules. KeyBanc maintained an Underweight rating with a $100 price target, citing concerns about legislative volatility affecting First Solar’s financial incentives. Meanwhile, KeyBanc also reiterated a Sector Weight rating, suggesting that First Solar’s stock is appropriately valued relative to its peers.
Sunrun (NASDAQ:RUN) faced a downgrade from GLJ Research to Sell, with concerns over cash burn and the impact of the Senate’s tax-and-spend bill on its growth prospects. The bill’s provisions could hinder Sunrun’s ability to sell tax credits, posing a significant challenge for the company. First Solar, however, benefits from the bill’s unchanged 45X credits for solar production, as noted by GLJ Research. RBC Capital Markets analysts pointed out mixed implications for solar-linked clean energy stocks due to the Senate bill’s passage. These developments underscore the complex landscape facing renewable energy companies amid evolving legislative and market conditions.
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