BMO Capital Markets upgraded First Solar (NASDAQ: FSLR) to Outperform from Market Perform on Wednesday, assigning a price target of $263. The move follows the U.S. implementation of a tariff framework aimed at supporting domestic solar manufacturing, which analysts expect will stabilize pricing and volume commitments for the company.
Mizuho retained its Outperform rating on First Solar with a price target of $324, up from $300 previously, aligning its view with the tariff structure enacted under the current administration. Baird also upgraded the stock to Outperform from Neutral, raising its price target to $318. Jefferies, however, lowered its price target to $196 while maintaining a Hold rating, reflecting a more cautious stance amid broader sector volatility.
First Solar’s shares have declined approximately 16% following developments related to Section 232 tariffs, contributing to a 21% year-to-date loss. The stock closed at $205.93 on Tuesday, down 0.43%, though pre-market trading indicated a 4.02% gain to $214.20. The company’s valuation metrics remain compelling, trading at roughly 8.6 times estimated 2029 enterprise value to EBITDA excluding production tax credits—making it the least expensive solar original equipment manufacturer in BMO’s coverage universe. Its trailing P/E ratio stands at 12.67, with a PEG ratio of 0.33.
BMO anticipates U.S. module average selling prices (ASPs) could rise to between $0.43 and $0.44 per watt under the new tariff and minimum import price framework. This pricing environment is expected to enable First Solar to secure multi-quarter volume commitments for 2029 and beyond at improved rates. However, margin pressures are projected to persist through 2027, according to BMO’s analysis.
The broader solar sector faces additional headwinds, including potential U.S. tariffs on Chinese polysilicon—a key material in panel production—reported by Reuters. BMO’s assessment suggests Tesla’s required ASP may align with or exceed a conservative $0.38 per watt assumption during its ramp period, indicating potential risks for Crystal Sun’s pricing strategy in the latter half of the decade.
