FSLR - First Solar sinks 15% as Q1 sales bookings fall more than expected

2023-04-28 10:54:07 ET

• First Solar ( NASDAQ: FSLR ) is the S&P 500's biggest loser in Friday's trading, -14.8% to a two-month low, as Q1 sales plunged compared to the prior quarter, with analysts noting weakening momentum in bookings.
• First Solar ( FSLR ) said its bookings growth fell by a third Q/Q in Q1 to 9.9 GW from 14.5 GW, and Morgan Stanley's Andrew Perceco said he is concerned that "customers will be more hesitant to sign long-term contracts as U.S. manufacturing expands meaningfully and the prevalence of domestic panel suppliers increases."
• But Perceco - who rates the stock at Underweight with a $200 price target - also noted ASP trends "remain quite robust, as is evidenced by the $0.318/W ASP on the 4.8 GW of backlog signed" since the Q4 2022 earnings call.
• Analysts also pointed out First Solar ( FSLR ) maintained its guidance for the full year due to the timing of contractual delivery schedules, timing of first sales of Series 7 modules, and timing of recognition of IRA credits.
• On Thursday's post-earnings conference call , First Solar ( FSLR ) CEO said the company is waiting for guidance from the U.S. Treasury Department on the Inflation Reduction Act's domestic content bonus provision.
• J.P. Morgan analyst Mark Strouse said IRA guidelines could be released within the next 1-2 months, which should provide a catalyst for First Solar ( FSLR ) stock.
• "We believe more restrictive guidelines on the definition of a U.S.-made solar module would be a positive for FSLR and likely result in the company announcing further manufacturing expansion soon thereafter, with a longer runway before competitors potentially enter," Strouse wrote, but "less restrictive guidelines would be a negative... likely encouraging more competition sooner, and likely leading to a material slowdown" in First Solar's bookings volume and average selling prices.

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