On Monday, Deutsche Bank upgraded its rating on First Solar shares from Neutral to Buy, significantly raising its price target from $245 to $272. This new target implies a potential upside of nearly 17% from Monday's closing price of $233. This positive analyst action helped lift the solar panel manufacturer's stock by close to 3% in pre-market trading.
Rationale for the Upgrade
Analysts from the bank provided three key reasons for their bullish stance, suggesting the recent pullback in the share price offers an attractive entry point for investors. Since June 1st, the stock has declined by approximately 24%, a drop largely attributed to the market awaiting the outcome of a U.S. government investigation into polysilicon imports. Polysilicon is a critical material for solar panels, and the direction of import policy directly impacts First Solar's capacity for expansion.
Deutsche Bank anticipates a decision on the investigation is likely in August, with market consensus expecting a fixed tariff per watt rather than restrictive import quotas on solar materials. The analysts believe that once this policy uncertainty is resolved, it could serve as a significant catalyst for First Solar's stock price. They point to the current moment as an opportune time to position ahead of the company's expected second-half growth, a return to normalized operations, and the potential realization of favorable policy outcomes.
Broader Market Sentiment
The overall market sentiment appears to align with Deutsche Bank's assessment. Among the analysts covering the stock, the majority recommend a Buy or Strong Buy rating.
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