On Thursday, Mizuho Securities adjusted its outlook on First Solar (NASDAQ:FSLR), increasing the stock's price target to $209 from the previous $196. The firm sustained its Buy rating on the shares. The revision follows First Solar's confirmation of its profit and loss guidance for 2024, although the company anticipates some project delays which may affect cash flow for the year.
The updated stock price target reflects Mizuho's analysis of new booking average selling prices (ASPs), which have remained relatively stable at 31.3 cents per watt, closely aligning with the fourth quarter's 31.8 cents and showing an improvement over the third quarter's 30 cents. The firm notes these figures as an indicator of pricing trends.
Mizuho's optimism is further bolstered by higher ASPs observed in the U.S. market as of April. The firm anticipates additional pricing advantages in the upcoming summer months. This anticipation is attributed to the uncertainty surrounding import tariffs, including those on bifacial solar modules and anti-dumping/countervailing duties (AD/CVD), which could drive module prices higher.
The increased stock price target to $209 is specifically tied to the expectation of stronger module pricing power for First Solar's deliveries projected beyond 2026. Mizuho reaffirms its Buy rating on the company's stock, signaling confidence in First Solar's market positioning and financial outlook amidst the current industry dynamics.
InvestingPro Insights
Following Mizuho Securities' optimistic revision of First Solar's (NASDAQ:FSLR) price target, real-time data from InvestingPro further strengthens the company's financial outlook. With a robust market capitalization of $19.01 billion and a healthy P/E ratio of 23.33, First Solar stands as a significant player in the solar industry. The adjusted P/E ratio for the last twelve months as of Q1 2024 is even more attractive at 18.11, indicating potential for investment value.
InvestingPro data also highlights a substantial revenue growth of 27.28% over the last twelve months as of Q1 2024, with an impressive quarterly revenue growth of 44.83% in Q1 2024. This growth trajectory is complemented by a gross profit margin of 43.05%, showcasing the company's ability to maintain profitability amidst market fluctuations. Moreover, First Solar has demonstrated strong returns, with a 25.22% price total return over the last three months.
InvestingPro Tips for First Solar indicate a solid financial structure, as the company holds more cash than debt and has liquid assets that exceed short-term obligations. Analysts have a positive outlook, with sales growth anticipated in the current year and earnings revisions pointing upwards for the upcoming period. These insights suggest that First Solar is well-positioned to capitalize on market opportunities and may offer a promising investment case.
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