Company Reports

Last week, Reuters reported the Biden administration is expected to reinstate 15% tariffs on bifacial solar modules. This follows speculation that a new round of antidumping and countervailing duties (AD/CVD) could be coming this summer. We view these reports, along with recent comments from Treasury Secretary Janet Yellen, as pointing to further tightening of solar panel imports into the US. Further tightening would benefit First Solar, while being a net negative for the rest of our solar sector coverage.

We maintain our $185 fair value estimate for no-moat First Solar following the company's fourth-quarter results. We view shares as undervalued and among the most compelling in our broader clean energy coverage.

First Solar is the world leader in thin-film solar panel technology. Following the exit from its development business in recent years, the company is a pureplay manufacturer of solar panels.

Clean energy stocks have had a roller-coaster 18 months. Optimism following the passage of the Inflation Reduction Act in August 2022 gave way to rising interest rates in 2023. We highlight three key themes for investors to focus on in 2024: interest rates, U.S. policy, and profitability.

We maintain our $185 fair value estimate for no-moat First Solar following the company's third-quarter results. We view the shares as undervalued after a selloff in recent months on fears of the global solar panel oversupply spreading to the U.S. market.

This week we attended the RE+ conference and trade show in Las Vegas. The conference and exhibit hall provided an opportunity to meet with companies as well as see latest product unveilings. We highlight our key takeaways below.

We maintain our $185 fair value estimate for no-moat First Solar after attending the company’s analyst day in Perrysburg, Ohio. We view the shares as fairly valued.

On Aug. 15, First Solar disclosed that a recent audit found four onsite service providers at its Malaysia factory subjected migrant workers to forced labor. Specifically, the migrant workers were subjected to unethical recruitment, including the payment of recruitment fees in their home countries, passport retention, and the unlawful retention of wages. The company is requiring the service providers to change how they treat workers and agree to periodic reviews by First Solar moving forward. We maintain our prior financial estimates and leave our $185 fair value estimate unchanged. We view the shares as fairly valued.

We maintain our $185 per share fair value estimate for no-moat First Solar following the company's second-quarter earnings release. We view the results and commentary as slightly positive, but not enough for us to materially change our assumptions. We view shares as fairly valued.

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.

First Solar is the world leader in thin-film solar panel technology. Following the exit from its development business in recent years, the company is a pureplay manufacturer of solar panels.

We maintain our $174 fair value estimate for no-moat First Solar following the company's first-quarter earnings release. The shares were trading 13% lower at the time of writing, which we view as attributable to high expectations (the stock is up 178% over the past year). We see the shares as fairly valued following the pullback.

The passage of the Inflation Reduction Act was heralded as the largest climate legislation in U.S. history. As a result, the legislation has had an impact on technology adoption expectations and, in some cases, the competitive landscape. While the legislation has already led to a dramatic impact on industry activity, we believe market participants are awaiting additional clarifications from the IRS on certain incentives prior to making further investments. We highlight three specific incentives to watch as the U.S. Department of the Treasury issues clarifications in the months ahead.

We have increased our fair value estimate for no-moat First Solar to $174 per share from $152 following its fourth-quarter results and 2023 outlook. Our increased valuation is a result of assuming the company is able to retain a higher percentage of U.S. solar manufacturing credits as well as higher average selling prices. Despite our valuation bump, we view much of the good news as already priced in at current trading levels.

First Solar pivoted back to its origins as a supplier of thin-film solar modules in recent years following the exit of its development and operations and maintenance businesses.

We've increased our First Solar fair value estimate to $152 per share from $135 following third-quarter results. The primary driver of our increase is higher average selling prices based on the company's recent bookings. We continue to view First Solar as uniquely positioned to benefit from recently passed U.S. solar manufacturing incentives. The shares trade at an approximate 13% discount to our revised fair value estimate.

First Solar has pivoted back to its origins as a supplier of thin-film solar modules following the exit of its North American development business and its operations and maintenance business in 2021.

U.S. manufacturing incentives that recently passed as part of the Inflation Reduction Act of 2022 are set to unleash a dramatic buildout of domestic solar manufacturing. After further analyzing the impact of the act, we view First Solar as uniquely positioned given its differentiated technology, existing U.S. manufacturing presence, and multi-year forward contracts. We view shares as fairly valued relative to our revised $135 fair value estimate following a 47% jump year to date.

First Solar has pivoted back to its origins as a supplier of thin-film solar modules following the exit of its North American development business and its operations and maintenance business in 2021.

On Aug. 30, First Solar announced it plans to invest up to $1.2 billion to add 4.4 gigawatts (GW) of additional U.S. solar manufacturing capacity. This announcement follows the recent passage of solar manufacturing incentives as part of the Inflation Reduction Act of 2022. As a result, we are reviewing our long-term outlook for First Solar. We anticipate raising our $100 per share fair value estimate by at least 20% in response. Our no-moat and positive moat trend ratings are unchanged.