First Solar: Shares Jump Following U.S. Treasury Guidance on Domestic Content Requirements

First Solar shares rose sharply (up 25% at the time of writing) following the U.S. Department of the Treasury guidance on domestic content requirements for solar panels. We raise our fair value estimate to $185 from $174 (based on our current understanding of the requirements) and expect the company to announce a further U.S. capacity expansion in short order. Despite our increased valuation, we view shares as overvalued.