First Solar Is Balancing Rising Capacity And Falling Prices: Analyst Initiates With Cautious Outlook

BMO Capital Markets analyst Ameet Thakkar initiated coverage on First Solar Inc FSLR at Market Perform rating with a price target of $204.

The analyst sees FSLR as the only significant U.S. producer of domestic solar modules and a 'winner' under the inflation reduction act (IRA).

Thakkar projects higher demand for domestic solar modules that adheres to the IRA domestic content requirements and comply with additional regulations to boost FSLR's backlog and pricing power.

The analyst expects the addition of more than 40 GWs of new module capacity in the U.S. by 2025.

However, Thakkar is cautious about the stock, given falling global prices for solar modules and the rise in capacity in the U.S.

The analyst expects IRA PTCs to drive ~3x growth in FSLR's earnings between 2023 and 2026. 

Thakkar estimates EPS of $7.06 in 2023 (consensus: $7.24), $12.70 (consensus: $12.66) in 2024, $19.31 in 2025, and $21.99 in 2026.

Price Action: FSLR shares are trading higher by 1.21% at $191.42 on the last check Monday.