First Solar (NASDAQ:FSLR) got an “overweight” rating from Barclays, sending the stock up overnight.
FSLR stock is expected to open this morning at about $151.50 per share, a market capitalization of nearly $16.8 billion on expected 2023 revenue of nearly $3 billion.
The upgrade includes a price target of $224 per share.
FSLR Stock: Sole Solar Survivor
First Solar has withstood competition from Chinese solar companies by using cadmium telluride technology rather than silicon. The company says it derives its raw material from mine tailings.
But the stock has had a rough ride. It fell from a May high of $231 per share. That followed a jump from $72 per share in mid-2022, which represented a fall from $119 the previous October.
First Solar reported earnings of $170 million, $1.60 per share, in the second quarter, on revenue of $810 million. Sales were up 30% from a year earlier, and the company ended the quarter with a net cash balance of $1.5 billion. It next reports results on Oct. 26.
CEO Mark Widmar credited higher prices for its Series 7 modules for the improved results. The panels are made in Ohio specifically for the utility-scale market. A big selling point is that their performance degrades more slowly than silicon panels.
This is the second boost in a year from Barclays, which only lifted its rating to “market weight” last November. The stock was upgraded last month by Deutsche Bank.
I wrote back in December 2020 that First Solar needed a “tech refresh,” given a host of new technologies like perovskites and plastics, and then approaching the market. Management ignored me, putting $680 million into its new Ohio factory. That investment is now paying off.
What Happens Next?
First Solar has an order backlog of nearly 78 GWatts of panel production, with orders extending out to 2028. Its technology may be vulnerable, but its niche right now looks secure.
As of this writing, Dana Blankenhorn did not hold (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.
