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On Wednesday, Goldman Sachs made adjustments to First Solar’s stock (NASDAQ:FSLR) financial outlook, with analyst Brian Lee reducing the price target to $204 from the previous $235, while still maintaining a Buy rating on the stock. Trading at a P/E ratio of 11.42 and showing "GREAT" financial health according to InvestingPro metrics, First Solar appears undervalued based on comprehensive Fair Value analysis. The reassessment comes after First Solar announced their first quarter results for 2025 and updated their full-year guidance, reflecting the potential impact of tariff uncertainties.
First Solar’s revised 2025 guidance now accounts for a range of tariff scenarios. The lower end of the guidance considers full reciprocal tariffs on key countries where First Solar has exposure, specifically India, Malaysia, and Vietnam. Conversely, the higher end includes a universal 10% tariff assumption. With revenue projected to grow by 31% in FY2025 according to analyst forecasts, Lee pointed out that the updated guidance range and midpoints are not significantly different from what was anticipated before the earnings call, except for the margins.
The Goldman Sachs analyst indicated that the stock might face near-term pressure and could remain range-bound until there is more clarity regarding tariffs. However, Lee also suggested that any positive developments in tariff negotiations or trade deals with the countries affecting First Solar’s operations could act as catalysts for the stock. Such developments might lead to an upward revision in guidance on the next earnings call, assuming other factors remain constant.
Investors are now looking ahead, weighing the potential impacts of tariffs on First Solar’s operations and future financial performance. The company maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 1.93. The market response to these updated projections and the ongoing trade discussions will be closely monitored, especially as they pertain to any changes in First Solar’s strategic positioning and financial health. For deeper insights into First Solar’s valuation and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, featuring detailed analysis of the company’s fundamentals and future outlook.
In other recent news, First Solar has reported first-quarter 2025 earnings that did not meet expectations, with earnings per share (EPS) of $1.95 falling short of the anticipated $2.54. Revenue also missed forecasts, coming in at $844.57 million against a projection of $866.19 million. The company has set its full-year 2025 EPS guidance between $12.50 and $17.50. KeyBanc Capital Markets has downgraded First Solar’s stock rating from Sector Weight to Underweight, setting a new price target of $100. This downgrade was influenced by First Solar’s lower-than-expected first-quarter results and reduced fiscal year 2025 guidance, as well as a downward revision of bookings. The company is facing challenges from newly imposed global tariffs that affect the volume of solar panels imported from production facilities in Vietnam, Malaysia, and India. Despite these setbacks, First Solar continues to expand its domestic capacity and innovate with its CURE technology modules, while navigating policy uncertainties related to the Inflation Reduction Act.
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