Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
On Wednesday, Truist Securities made a revision to the price target for First Solar (NASDAQ:FSLR) shares, reducing it from the previous $300.00 to $285.00. Despite the adjustment, the firm has maintained its Buy rating on the solar panel manufacturer’s stock. Analyst Jordan Levy highlighted that First Solar is navigating an uncertain market effectively, particularly noting its success in expanding manufacturing operations within the United States, securing a significant backlog, and advancing new product development. The stock, currently trading near its 52-week low of $144.28, has experienced a significant 37% decline over the past six months, though InvestingPro analysis suggests the stock is currently undervalued.
Levy acknowledged the potential risks associated with the company’s guidance for 2025, which is heavily dependent on the second half of the year and approximately 1.4 gigawatts of capacity yet to be allocated in international markets. However, he expressed confidence that First Solar has addressed many of the concerns that could have led to a more pessimistic outlook, specifically regarding warranty charges and volumes. The company’s strong financial position is evident in its healthy current ratio of 2.14 and moderate debt levels, with debt-to-equity at just 0.09.
The analyst also pointed out that while policy-related uncertainties remain, particularly in relation to the timing of the budget reconciliation bill, he believes that First Solar is poised to emerge from these challenges in a position of strength. As a result of these considerations, Truist Securities has recalibrated its estimates, leading to the revised price target of $285.00 while reaffirming its Buy stance on the stock. InvestingPro data reveals impressive revenue growth of 21.8% in the last twelve months, with analysts forecasting continued profitability for the current year.
First Solar has been focusing on scaling up its production capabilities in the U.S., which is a strategic move to meet the growing demand for solar energy solutions. The company’s ability to maintain a robust backlog of orders demonstrates the ongoing interest in its products and its competitive position in the market.
The update from Truist Securities comes as investors continue to monitor the performance of renewable energy companies in a market that is increasingly attentive to sustainability and the transition to cleaner energy sources. First Solar’s emphasis on innovation and product development, as noted by Levy, is indicative of its commitment to maintaining a leading role in the solar industry.
In other recent news, First Solar reported its fourth-quarter 2024 earnings, revealing a mixed financial performance. The company missed analyst expectations with an earnings per share (EPS) of $3.65, below the anticipated $4.83, but exceeded revenue forecasts with $1.5 billion, surpassing the projected $1.49 billion. Looking ahead, First Solar has provided optimistic guidance for 2025, projecting EPS between $17 and $20 and net sales of $5.3 billion to $5.8 billion. The company plans to increase its manufacturing capacity and explore new technologies. Citi analyst Vikram Bagri recently adjusted the price target for First Solar, reducing it to $236 from $254, but maintained a Buy rating on the shares. The adjustment came after First Solar’s financial report, which showed revenues slightly above consensus but a miss on gross margin due to various challenges. The company faced issues such as increased warehousing costs and delays in module shipments, impacting its earnings. Despite these challenges, First Solar’s strong position in the solar industry is highlighted by a 27% increase in net sales and a 55% rise in diluted EPS from 2023.
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