On Thursday, JPMorgan (NYSE:JPM) maintained its Overweight rating on First Solar (NASDAQ:FSLR) and increased its stock price target to $240 from $237. The adjustment follows First Solar's first-quarter earnings that surpassed expectations, mainly due to the timing of product deliveries. The company has also retained its full-year 2024 revenue and earnings per share (EPS) guidance.
First Solar's first-quarter bookings were in line with forecasts, and average selling prices (ASPs) were robust, exceeding $0.30 per watt. This performance is consistent with the company's strategy to focus on pricing rather than volume, backed by its multi-year backlog.
Notably, First Solar observed a rise in U.S. module prices in April, attributed to speculation about a new anti-dumping/countervailing duty (AD/CVD) investigation and the Biden Administration's trade policy remarks.
The momentum in pricing continued after First Solar and its peers filed an AD/CVD petition with the U.S. Commerce Department last week. Although JPMorgan anticipates that bookings activity might slow down in April and May until a decision on the investigation is announced, there is a potential upside for First Solar's bookings and ASPs to remain high for an extended period.
First Solar's stock has shown strong performance in the past month, in anticipation of the AD/CVD filing. JPMorgan suggests that the stock is still undervalued, considering First Solar's position as a preferred domestic supplier for U.S. customers.
The firm has raised its fiscal year 2025-26 estimates to reflect anticipated higher ASPs from the accelerated rollout of the company's CuRe technology. The revised year-end 2024 price target reflects these updated expectations.
InvestingPro Insights
Following JPMorgan's optimistic outlook on First Solar, current data from InvestingPro bolsters the company's strong financial position. First Solar's market capitalization stands at a robust $19.01 billion, with a forward-looking P/E ratio of 18.11, indicating investor confidence in its earnings potential. Moreover, the company's revenue growth over the last twelve months leading up to Q1 2024 has been impressive at 27.28%, with an even more remarkable quarterly revenue growth of 44.83% in Q1 2024.
InvestingPro Tips highlight that First Solar not only holds more cash than debt, enhancing its financial stability, but also that analysts predict sales growth in the current year. This aligns with the company's retained full-year 2024 revenue and EPS guidance.
Moreover, First Solar has been profitable over the last twelve months, and analysts expect profitability to continue this year. These insights, along with a strong return of 25.22% over the last three months, further validate JPMorgan's positive rating and increased price target.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/FSLR. Using the coupon code PRONEWS24, readers can receive an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further valuable insights into First Solar's performance and potential.
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