Despite a rather risk-off day in the markets today, there are a few stocks that are seeing outsized moves higher. One such stock which is grabbing significant attention today is First Solar (NASDAQ:FSLR). At the time of writing, FSLR stock is up more than 10% as investors digest a bullish analyst note.
On Friday, Bank of America analyst Julien Dumoulin-Smith reiterated a “buy” rating and raised his price target for this stock to a rather hefty $165. This represented more than 24% upside from Friday’s close, and is among the highest target prices on the Street.
Notably, this move follows already bullish price action for First Solar, which has been on a tear this year. Starting the year off around $85 per share, First Solar has hit a fresh new 52-week high today at more than $147 per share, representing a move of more than 65% year-to-date.
There are few such stocks on the market right now trading at such a significant premium to where they started the year, outside of conventional energy-related stocks. Let’s dive into why investors and analysts are viewing this solar stock as a compelling bet right now.
Why Is FSLR Stock On Such a Tear?
In Dumoulin-Smith’s bullish note Friday, a number of key catalysts were pointed out as reasons for this impressive price target hike.
Despite missing earnings and revenue estimates during the company’s quarterly results last week, this Bank of America analyst believes First Solar’s growth prospects are among the best in the sector. The company will likely benefit from the Inflation Reduction Act incentives and other geopolitical catalysts. However, as a leader in this sector, it’s becoming the view of many that First Solar has more to gain from a bullish macro backdrop than its competitors.
The question many have is how much of this upside potential has already been captured by FSLR stock’s move this year. After all, it’s up more than 70% this year alone, and it’s clear most investors are seeing this company the same way.
That said, it’s clear more attention will be paid to renewables players with significant U.S. footprints. First Solar is such a company, which could allow U.S. companies an offramp from reliance on predominantly Chinese players in this space. With geopolitical concerns where they are right now, First Solar could be in the sweet spot relative to its peers.
For now, I think FSLR stock is one to put on the watch list. This is a company I think investors are right to be bullish on. That said, this has been a volatile market, and I expect that volatility to continue.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
