Why First Solar Stock Surged Today

What happened

Shares of First Solar (FSLR 5.10%) jumped 9.7% on Monday, following bullish commentary from two Wall Street investment teams.

So what

Bank of America analyst Julien Dumoulin-Smith reiterated his buy rating on First Solar’s stock. He now sees the solar panel manufacturer’s share price rising roughly 13% to $165, up from his prior forecast of $138.

First Solar’s third-quarter financial report showed that it’s well positioned to benefit from the industry’s favorable supply and demand dynamics, according to Dumoulin-Smith. In turn, he expects First Solar — and its stock — to perform well in 2023.

Looking even further ahead, Dumoulin-Smith thinks strong demand for solar energy solutions will fuel solid growth in First Solar’s earnings through 2027. 

Guggenheim Partners analyst Joseph Osha is even more bullish on First Solar’s stock. He sees the solar leader’s share price soaring 60% to $233.

Osha argued that First Solar’s stock is a buy, due in part to its strong bookings growth. He’s particularly impressed by the company’s ability to strike deals for projects “several years into the future at favorable prices.” 

Now what

First Solar is poised to be a prime beneficiary of the Inflation Reduction Act of 2022, which contains a whopping $369 billion in climate change and energy security investments. The legislation is intended to help the U.S. slash its carbon emissions by as much as 40% by the end of the decade. 

On Thursday, First Solar said it would invest $270 million to build a new research and development facility in Ohio, aided by an array of government-funded incentives. 

“We expect that this new facility will play a pivotal role in solidifying America’s leadership in the development and responsible production of high-performance thin film photovoltaic semiconductors,” chief technology officer Markus Gloeckler said. “This facility will be designed with the future in mind and we expect that it will directly enable the next generation of advanced photovoltaics.”

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.