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On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its price target for First Solar shares, bringing it down slightly from $252.00 to $251.00, though the firm maintained its Outperform rating on the stock. According to InvestingPro data, First Solar currently trades at $137.24, significantly below its 52-week high of $306.77, with analysis suggesting the stock is undervalued. The adjustment reflects a nuanced view of First Solar’s financial outlook, particularly in light of the company’s recently revised guidance for 2025.
The reduction in the price target is largely attributed to higher underutilization costs at First Solar’s Southeast Asia production facilities. Analysts at Mizuho noted that these costs are expected to be about $40 million higher due to approximately 0.7 gigawatts lower production in the region. This change comes as First Solar faces a 10% import tariff impact, which Mizuho estimates to be around $90 million, closely aligning with their previous estimate of $94 million. InvestingPro analysis shows the company maintains strong financial health with a "GREAT" overall score of 3.2, supported by robust liquidity ratios and minimal debt exposure.
Despite the slight decrease in the price target, Mizuho’s analysts underscored their confidence in First Solar’s future performance. They pointed to the top end of the company’s 2025 guidance, which remains consistent with Mizuho’s estimates and the prior midpoint. The low end of the guidance takes into account a more pessimistic scenario regarding tariffs, which could potentially lead to First Solar idling its Southeast Asia operations, representing about 30% of this year’s capacity. InvestingPro data reveals impressive growth metrics, with revenue expected to grow 31% in FY2025 and the company trading at an attractive P/E ratio of 11.42.
Mizuho’s reiteration of the Outperform rating is based on First Solar’s strong contracted position, intellectual property claims against TOPCon technology, and stable pricing. The analysts believe these factors support a positive outlook for the company, even if the incentives provided by the Inflation Reduction Act are removed.
The valuation adjustment by Mizuho reflects a careful consideration of First Solar’s near-term challenges, particularly in Southeast Asia, while also taking into account the company’s overall strategic strengths and market position.
In other recent news, First Solar Inc (NASDAQ:FSLR). reported its first-quarter 2025 earnings, revealing a significant miss in both earnings per share (EPS) and revenue compared to forecasts. The company reported an EPS of $1.95, falling short of the anticipated $2.54, and revenue of $844.57 million against a forecast of $866.19 million. Following these results, KeyBanc Capital Markets downgraded First Solar’s stock rating to Underweight and set a new price target of $100, citing lower-than-expected sales and earnings. Similarly, Oppenheimer analysts downgraded the stock from Outperform to Perform, due to ongoing policy uncertainties affecting tariffs and tax credits.
BofA Securities also adjusted its outlook by reducing the price target to $185, while maintaining a Buy rating, noting the company’s decision to cut up to 2.5 gigawatts of potentially uneconomic volume from its guidance. Goldman Sachs followed suit, lowering the price target to $204 but maintaining a Buy rating, highlighting the potential impact of tariff uncertainties on First Solar’s operations in key countries like India, Malaysia, and Vietnam. First Solar’s management is navigating these challenges by potentially idling production facilities in Malaysia and Vietnam, and shifting focus towards domestic production in the U.S. and India.
Despite these challenges, First Solar maintains a substantial backlog of 54 gigawatts not subject to tariff exposure, and analysts from BofA Securities believe the company could benefit from alignment with the Inflation Reduction Act and Future Energy Outlook Conference regulations. The company provided a full-year 2025 EPS guidance range of $12.50 to $17.50, reflecting the ongoing policy and market challenges. Investors and stakeholders are closely monitoring these developments as First Solar’s strategic decisions could significantly influence its future operational and financial performance.
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