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On Wednesday, UBS maintained its Buy rating on First Solar (NASDAQ:FSLR) shares and increased the price target to $255 from $235, well above the current trading price of $191.60. The adjustment reflects UBS’s growing confidence that the Advanced Manufacturing Production (45X) domestic tax credits will remain intact in the Republican budget. According to InvestingPro data, First Solar has demonstrated remarkable momentum with a 47.63% return over the past week, while analysts’ price targets currently range from $100 to $304.
First Solar’s stock price target was revised following the introduction of a budget proposal by the House Ways & Means Committee on May 12, 2025. The proposal suggested relatively minor changes to utility-scale solar tax policy support, which were less drastic than market concerns had anticipated. The amendments included a one-year acceleration of the phase-out of the 45X tax credit and the removal of tax credit transferability.
UBS views these proposed changes as positive for the utility-scale solar industry, considering them a victory given the outlook for renewable tax policy is more favorable than the worst-case scenario previously feared by the market. The firm regards First Solar as a top pick within the sector, signaling optimism about the company’s prospects under the proposed tax policy framework. This optimism is supported by First Solar’s strong financial performance, with InvestingPro data showing impressive revenue growth of 19.42% and a P/E ratio of 16.17, suggesting reasonable valuation relative to growth potential.
The budget proposal’s impact on First Solar and the utility-scale solar sector is seen as limited, with the main takeaway being that the 45X tax credits are likely to continue. This continuation is seen as a key factor in UBS’s increased price target for First Solar.
The proposed budget by the House Ways & Means Committee is not yet final and will require the passage of the bill to become effective. The outcome of this legislative process will be closely monitored by investors and industry stakeholders, as it holds significant implications for the renewable energy sector.
In other recent news, First Solar has been the focus of several analyst evaluations and adjustments following its latest earnings and revenue announcements. Piper Sandler reaffirmed an Overweight rating with a $205 price target, highlighting the company’s strong first-quarter performance despite tariff challenges and a positive outlook due to robust power demand. Goldman Sachs, however, reduced its price target from $235 to $204 while maintaining a Buy rating, citing unremarkable first-quarter results for 2025 and revised guidance due to tariff uncertainties. Wolfe Research upgraded First Solar from ’Peer Perform’ to ’Outperform’ with a new price target of $221, attributing the change to benefits from the Inflation Reduction Act and bipartisan support for tax credits. Conversely, Jefferies downgraded First Solar from "Buy" to "Hold" and slashed the price target to $127, reflecting concerns over margin compression and challenging market conditions. Truist Securities also lowered its price target to $200 from $245, maintaining a Buy rating and noting the complexities of the utility-scale solar industry and the company’s strategic advantages due to its U.S.-based supply chain. These developments indicate varying perspectives among analysts regarding First Solar’s potential amid tariff uncertainties and legislative changes.
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