BofA Downgrades First Solar On Lack Of Pricing Power

Although there are several tailwinds for First Solar, Inc. FSLR, U.S. policy challenges have “consistently failed” to drive pricing power for the company, according to BofA Securities.

The First Solar Analyst: Julien Dumoulin-Smith downgraded the rating for First Solar from Neutral to Underperform, while reducing the price target from $76.50 to $65.50.

Also Read: This Solar Company's 5-Year Return Makes Bitcoin, Tesla, Disney, Apple, Microsoft, Ford, And Alibaba Look Trifling

The First Solar Thesis: The company’s fourth-quarter print was “particularly messy” and consensus estimates for EBTIDA have been reduced by more than 25%, Dumoulin-Smith said in the downgrade note.

“While Chinese peers are facing similar headwinds we emphasize most seeing positive revisions still even despite the policy headwinds with trading multiples flat,” the analyst wrote.

“At the end of the day, expansion is not backed by fundamentals, leaving shares susceptible to significant derating in our view,” he added.

FSLR Price Action: Shares of First Solar had declined by 3.60% to $80.94 at the time of publication Tuesday.