Why First Solar Stock Just Got Upgraded

First Solar stock has fallen more than 44% since early June. That could give investors a good entry point, according to Truist. (Courtesy First Solar)

Key Points

• First Solar stock rises after Truist Securities analyst Christopher Souther upgrades the solar panel manufacturer to Buy from Hold.
• Souther raised his First Solar price target to $270 from $229, representing a 51% upside from Friday’s closing price.
• The analyst cites a recent valuation reset and signs of rising solar demand through the end of the decade as reasons for the upgrade.

First Solar stock rose Monday after shares of the major solar panel manufacturer were upgraded to Buy even as the stock price has retreated sharply in recent months.

Shares of First Solar advanced 2.4% to $182.10 in premarket trading on Monday after ending Friday down 0.6% at $177.82. The stock has fallen 32% this year and has declined 44% since June 3, when it closed at $318.25.

That sharp stock price decline was one of the reasons that Truist Securities analyst Christopher Souther upgraded First Solar to Buy from Hold and raised his price target to $270 from $229. That price target represented 51% upside from the closing price on Friday.

Souther said in a research note that the recent “valuation reset” along with signs that solar demand will pick up in the coming years were major reasons for his bullish view on the stock.

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The analyst noted that recent regulatory decisions should support pricing upside for First Solar bookings. Souther added that solar panel demand is expected to rise through the end of the decade and into the 2030s.

While First Solar stock was rising Monday, the Invesco Solar ETF fell 0.7%. Among other solar stocks, Enphase Energy was a fraction lower, Sunrun declined 0.3%, and Nextpower was down 0.4%.

Write to Kit Norton at kit.norton@barrons.com

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