BMO Capital upgraded First Solar to Outperform from Market Perform on Wednesday, citing an improved outlook for U.S. solar module tariffs and setting a price target of $263.
The upgrade follows a 16% drop in First Solar shares amid Section 232 tariff developments, pushing the stock to a year-to-date loss of 21%. BMO noted the company trades at approximately 8.6 times estimated 2029 enterprise value to EBITDA, excluding production tax credits, making it the cheapest original equipment manufacturer in its solar coverage universe. First Solar’s current P/E ratio stands at 12.67 with a PEG ratio of 0.33.
BMO expects the new tariff framework to push average U.S. module selling prices into the $0.43 to $0.44 per watt range. Margin pressures are projected to persist until 2027. The firm also highlighted that Tesla’s average selling price requirements align with or exceed its conservative estimate of $0.38 per watt during expansion, noting that the "Crystal Sun" initiative poses a risk for the latter half of the decade.
Mizuho reiterated an Outperform rating with a raised price target of $324, up from $300 previously. Baird upgraded First Solar to Outperform from Neutral and lifted its target to $318. Jefferies, however, lowered its price target to $196 while maintaining a Hold rating.
The tariff discussions center on Section 232 measures and a potential minimum import price mechanism. A Reuters report indicated U.S. consideration of a price floor and tariffs on Chinese polysilicon, a key solar panel input.
