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On Monday, Goldman Sachs updated its outlook on First Solar stock (NASDAQ:FSLR), raising the price target to $255 from the previous $204, while reiterating a Buy rating on the shares. The revision reflects an increase in the price-to-earnings (P/E) multiple from 8x to 10x, which the analyst attributes to anticipated benefits from potential tariff and policy relief. Currently trading at a P/E of 15.17x, InvestingPro analysis suggests First Solar is undervalued, with the stock showing strong momentum after gaining over 14% in the past week.
The firm’s analyst, Brian Lee, explained that the new 12-month price target is based on an expanded P/E multiple applied to their earnings per share (EPS) forecasts for the next four quarters. This adjustment acknowledges the potential for First Solar to outperform in the market due to favorable trade policies and tariff relief. The target also factors in approximately $3 per share in net cash. The $19.1 billion market cap company has demonstrated strong fundamentals, with revenue growing 19.4% over the last twelve months and maintaining a GREAT financial health score according to InvestingPro metrics.
Brian Lee pointed out that the key risks for First Solar include the possibility of module oversupply and higher than anticipated module costs. Trade policy developments and alterations to U.S. manufacturing credits also present potential challenges to the company’s performance. Despite these risks, InvestingPro data shows the company operates with moderate debt levels and maintains strong liquidity, with current assets exceeding short-term obligations by a ratio of 1.93.
First Solar specializes in manufacturing solar panels and is considered a leading player in the solar energy sector. The firm’s stock price movement following this updated guidance will be closely watched by investors, as it signals confidence from Goldman Sachs in the company’s ability to navigate the risks and capitalize on the opportunities laid out in the analyst’s commentary. With analyst targets ranging from $100 to $304, investors seeking deeper insights can access the comprehensive Pro Research Report available exclusively on InvestingPro, which includes additional analysis and 10 key tips about the company’s prospects.
In other recent news, First Solar has been the focus of various analyst actions and legislative developments. UBS raised its price target for First Solar to $255, maintaining a Buy rating, citing confidence in the continuation of the 45X tax credits as part of a proposed budget by the House Ways & Means Committee. Piper Sandler also reaffirmed an Overweight rating with a $205 price target, noting strong demand and resilience despite tariff challenges. Meanwhile, Goldman Sachs lowered its target to $204, maintaining a Buy rating, due to tariff-related uncertainties affecting First Solar’s guidance for 2025.
Wolfe Research upgraded First Solar from ’Peer Perform’ to ’Outperform’ with a new target of $221, attributing the decision to potential benefits from the Inflation Reduction Act and anti-China sentiment. However, Jefferies downgraded the stock from Buy to Hold, significantly reducing its price target to $127, due to concerns over a challenging near-term environment and potential margin pressures. These developments highlight the varied perspectives among analysts regarding First Solar’s future amid changing legislative and market conditions. Investors are closely watching how these factors will influence the company’s performance and strategic direction.
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