FSLR - First Solar downgraded at BofA as IRA priced in upside less compelling

First Solar ( NASDAQ: FSLR ) -3.3% in Thursday's trading as Bank of America downgraded shares to Neutral from Buy with a $195 price target, after steadily rising 75% during the past six months on optimism over the Inflation Reduction Act.

First Solar ( FSLR ) was understandably seen as a clear winner from the legislation given visibility to $8B-plus production tax credits, while the Uyghur Forced Labor Prevention Act has increased pricing and demand for the company's products, and the lack of Chinese manufacturing expansion in the U.S. fortifies its advantage as the only large, utility-scale U.S. module manufacturer.

But between the stock's outperformance and recent weakness in global solar prices, "favorable drivers are largely embedded" in the share price, BofA's Julien Dumoulin-Smith wrote.

Also, given the recent collapse in solar prices, the analyst sees higher risk that First Solar's ( FSLR ) bookings and pricing momentum slows.

First Solar ( FSLR ) is positioned to raise its revenue by 20%-25% in 2023, and is set to return to margins that should help it regain historical profitability levels, The Value Analyst writes in an analysis published on Seeking Alpha .

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