First Solar (ticker: FSLR) witnessed a surge in its stock price on Friday as analysts expressed confidence in the solar panel company's prospects.
Emphasizing Cost Cutting and Technology Investments
In a highly anticipated event, First Solar held its first analyst day since 2017, presenting its strategic plans to investors and Wall Street analysts. The company laid out its ambitious roadmap for the next three years, which focuses on two key areas: cost reduction and technological advancements.
Promising Gross Margin Growth
One of the most significant announcements made by First Solar's management was their optimistic outlook on gross margin. They projected a notable increase from the current 20% to an impressive 30% over the next three years. This projection excludes the value of the Inflation Reduction Act, an important legislative initiative that incentivizes homeowners to install solar panels on their roofs.
A Positive Impact and Unwavering Demand
First Solar credits the Inflation Reduction Act for bolstering its backlog and driving an uptick in demand. Despite concerns over persistently high inflation and rising interest rates negatively impacting the solar industry, First Solar remains steadfast in its positive outlook.
Chief Financial Officer Alexander Bradley reaffirmed the positive impact by stating, "The IRA was signed in the middle of 2022. This has undoubtedly helped our backlog. It’s undoubtedly helped demand."
As the market absorbs First Solar's bold ambitions and optimistic outlook, investors remain eager to see this industry leader continue its growth trajectory.
Deutsche Bank Analyst Upgrades First Solar Stock
Deutsche Bank analyst Corinne Blanchard recently upgraded shares of the solar company, First Solar, to Buy from Hold. Additionally, she increased her price target for the stock to $235 from $220, suggesting a 30% increase from the stock's closing price on Thursday.
Positive Outlook for First Solar
Blanchard expressed optimism about First Solar, stating that the company had delivered a strong three-year roadmap with improving numbers and core margins. She believes that the company has fulfilled what investors have been seeking.
Optimistic Projections from Other Analysts
Multiple other analysts share Blanchard's positive sentiment towards First Solar. Colin Rusch from Oppenheimer raised his price target to $268 from $262 while maintaining an Outperform rating. Rusch believes that First Solar is well-positioned to capture a significant share within the U.S. solar market due to its advantaged cost profile.
Similarly, TD Cowen analyst Jeffrey Osborne maintained his Outperform rating and $293 price target for the stock. He highlighted that First Solar is a leading provider of utility-scale photovoltaic (PV) solar systems and maintains a strong project backlog.
Recent Stock Performance
The shares of First Solar saw a 2.8% increase on Friday, reaching $185.48. So far in 2023, the stock has gained 21%.