- Recent Downgrades: First Solar (FSLR) faced downgrades from analysts at Mizuho Securities and DZ Bank AG due to concerns over its valuation, with price targets set at $274.00 and $270.00, respectively. This has led to a 7.81% drop in its stock price to $263.69.
- Market Position and Valuation: FSLR has a significant market share in the U.S. solar module market, giving it pricing advantages. However, the company’s current valuation already reflects this strength due to anticipated tariffs and limited competition.
- Analyst Consensus: Despite downgrades, FSLR maintains a consensus rating of “buy” among analysts, though it now has 6 hold recommendations. Comparatively, its peers like Enphase Energy and SolarEdge Technologies have more hold and sell ratings, indicating a trend of weak growth outlooks in the solar sector compared to other sustainable energy sources like nuclear and geothermal.
First Solar (NASDAQ:FSLR) is a leading American solar technology company specializing in photovoltaic (PV) solar power plants, and solar panel manufacturing. Founded in 1999, FSLR is a dominant force in the solar energy space with a market capitalization of $28.1b.
On Thursday, May 29 analyst Maheep Mandloi of Mizuho securities downgraded FSLR primarily due to risks regarding valuation. The downgrade in rating accompanies a price target of $274.00
This comes the day after a report from DZ Bank AG, which downgraded the stock from a buy to a hold with a price target of $270.00
Both reports cite FSLR’s command over the US solar module market giving them a pricing advantage, however the company’s valuation already reflects this pricing power due to anticipated tariffs and lack of competition.
FSLR trades at $263.69, down 7.81% from Friday’s open.
While maintaining its consensus rating a buy, FSLR now has 6 hold recommendations, out of the 33 analysts covering the stock. FSLR still holds its analyst outlook when compared to some of its peers in the solar energy space. Enphase energy (another solar giant), now has 15 hold ratings, 2 sell ratings, and 1 strong sell rating out of 40 analysts, barely making consensus a buy. Finally, SolarEdge Technologies Inc. continues to receive bearish estimates with 26 hold ratings, 3 sell ratings and 1 strong sell.
Overall, the bearish reports follow a trend in the energy sector of weak growth outlooks in solar energy when compared with other sustainable energy such as nuclear and geothermal.
