BofA Downgrades First Solar On Potential Margin Pressure

The Section 201 Solar tariffs on bifacial panels will probably not be extended, which could potentially erode First Solar, Inc’s FSLR pricing power, according to BofA Securities.

The First Solar Analyst: Julien Dumoulin-Smith downgraded the rating for First Solar from Buy to Neutral, while lowering the price target from $114 to $91.

The First Solar Thesis: The company’s margins are likely to come under pressure, given that the recent backlog additions suggest flat to declining pricing for 2023 and beyond, Dumoulin-Smith said in the downgrade note.

“More recent transactions such as for the Israel developer Energix suggest ~$0.25/w ASP (Average Selling Price) in the 2023-2025 timeframe,” the analyst mentioned.

He lowered the 2023 ASP estimate by 1 cent to 27 cents per watt. “Incremental delays in higher efficiency new products like CuRe would result in further ASP pressure. CuRe rollout was delayed with 3Q21; we look for an update,” Dumoulin-Smith further wrote.

FSLR Price Action: Shares of First Solar had declined by 5.58% to $72.08 at the time of publication Thursday.