FSLR - First Solar started at Market Perform at BMO; demand positives mostly priced in

2023-07-10 15:56:05 ET

First Solar ( NASDAQ: FSLR ) +0.8% in Monday's trading as BMO Capital initiated coverage with a Market Perform rating and $204 price target, as the stock has been an unquestioned winner from the Inflation Reduction Act both in terms of increasing earnings power and improved visibility as developers race to secure domestic solar modules with FSLR currently the only significant U.S. producer.

The "game changer" phrase has been used too often since the passage of the IRA, but in First Solar's ( FSLR ) case "it is warranted and not hyperbole," according to BMO's Ameet Thakkar, as IRA premium tax credits should drive ~3x expansion of First Solar's earnings power during 2023-26.

Demand for domestic modules that adhere to IRA domestic content requirements and comply with additional regulations improves backlog and pricing power, but these positives are largely reflected in the current stock price, Thakkar said.

The analyst also is cautious on First Solar ( FSLR ) given falling global prices for solar modules and increases in capacity in the U.S.

More on First Solar:

• Financial and valuation comparison to sector peers
• Analysis: First Solar And Other Renewable Energy Stocks That Benefit From $400 Billion IRA Bill
• Stock price return: Up 26% YTD, up 171% in the past 12 months

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