In a report released today, Julien Dumoulin Smith from Jefferies downgraded First Solar (FSLR – Research Report) to a Hold, with a price target of $127.00.
Julien Dumoulin Smith has given his Hold rating due to a combination of factors affecting First Solar’s current market position. The company is facing macroeconomic challenges, including elevated reciprocal tariffs, which have led to a revision in management’s guidance. This guidance now ranges from a worst-case scenario to a status quo outlook, reflecting uncertainties in the market.
Despite First Solar’s position as the largest vertically integrated panel manufacturer in the US, concerns about margin compression persist, particularly with a gross margin of around 5% excluding certain factors. The company’s strategy to navigate these headwinds involves potentially sacrificing short-term margins, which could impact profitability. Additionally, the uncertainty surrounding tariff policies adds to the cautious sentiment, leading to a Hold rating with a price target of $127.