First Solar Bookings Were 'Subdued' In Q4: 9 Analysts Examine Earnings, Outlook

Benzinga - by Priya Nigam, Benzinga Staff Writer.

Shares of First Solar Inc (NASDAQ: FSLR) were climbing in early trading on Wednesday, after the company reported higher-than-expected earnings for the fourth quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

• Morgan Stanley analyst Andrew Percoco maintained an Overweight rating, while raising the price target from $237 to $245.
• Goldman Sachs analyst Brian Lee reiterated a Buy rating, while lifting the price target from $265 to $275.
• Mizuho Securities analyst Maheep Mandloi reaffirmed a Buy rating and price target of $196.
• BMO Capital Markets analyst Ameet Thakkar maintained an Outperform rating and price target of $194.
• Piper Sandler analyst Kashy Harrison reiterated an Overweight rating and price target of $195.
• RBC Capital Markets analyst Christopher Dendrinos reaffirmed an Outperform rating and price target of $195.
• Roth Capital Partners analyst Philip Shen maintained a Buy rating and price target of $230.
• Oppenheimer analyst Colin Rusch reiterated an Outperform rating and price target of $269.
• KeyBanc Capital Markets analyst Sophie Karp reaffirmed a Sector Weight rating on the stock.

Morgan Stanley: First Solar reported its fourth-quarter results and 2024 guidance broadly in-line with expectations, Percoco said in a note. “Improved pricing on incremental bookings should refute concerns around ASP compression,” he added.

“With 80 GW of contracted backlog (sold out through 2026 with contracts extending 2030), bookings will likely slow, but pricing should remain stable,” the analyst further wrote.

Goldman Sachs: Although First Solar’s bookings declined sequentially, this was mainly due to timing and “some customer pause related to political uncertainty in the US,” Lee said.

The company projected a book-to-bill of 1:1 for 2024, “suggesting a still-robust pipeline through the year, while ASPs came in well above the 30-cent threshold and would seem to dispel some of the bearish concerns around supply-demand and pricing in the current solar backdrop,” he added.

Mizuho Securities: First Solar’s fourth-quarter earnings were driven by lower costs, while 2024 guidance was largely in-line with expectations, Mandloi said in a note. First Solar’s new bookings ASP (average selling price) grew to 31.8 cents per watt, from the previous quarter’s 30 cents, “reflecting demand for non-China modules,” he added.

“We continue to believe that FSLR's new booking ASP should catch up with declining spot module prices, and fall to mid-high 20c/W in Q1 or through 2024,” the analyst stated.

BMO Capital Markets: First Solar delivered a strong finish to 2023, Thakkar said. “FY 2024 guidance for revenues of $4.4 to $4.6 billion and EPS ($13.00 to $14.00/share) largely came in-line with consensus,” he added.

First Solar’s ASP update was encouraging and the company seemed confident of achieving a 1:1 book-to-bill ratio in 2024, the analyst stated. “In an increasingly turbulent time for energy transition FSLR continues to offer best visibility,” he further wrote.

Piper Sandler: “We were particularly encouraged by better GMs ex-credits (+200 bps) due to lower COGS,” Harrison wrote in a note. While bookings were subdued, pricing was robust, he added.

“FSLR does not want to chase volumes at the expense of price particularly given uncertainty surrounding what may occur under a Republican presidency,” the analyst further stated.

RBC Capital Markets: “FLSR demonstrated strong execution and delivered an EPS beat despite a top line miss,” Dendrinos said.

“We believe there could be some elevated risks to sales this year due to a customer facing financial challenges, but believe FSLR has flexibility and strong contract terms that help minimize the impact,” he added.

Roth Capital Partners: “We had previewed here bookings could slow/incremental pricing could be weak though we were expecting pricing to ultimately remain resilient given the long list of policy catalysts ahead,” Shen wrote in a note.

“We were correct on the bookings as FSLR delivered 2.2GW vs. buyside expectations of ~3GW, but incorrect about pricing,” he added.

Oppenheimer: First Solar executed well “across metrics,” and the strong pricing for new bookings was “a positive surprise,” Rusch wrote.

“We continue to see domestic content adders from the IRA, import cost risk, broader pricing risk vs. FSLR's price clarity, and its history of on-time delivery as supporting FSLR sales,” he added.

KeyBanc Capital Markets: First Solar’s new bookings ASP was positive, given the soft global pricing environment, Karp said.

She added, however, that the company expects its bookings to slow in the near term “as it becomes more selective with opportunities, given its ~80 GW backlog that accounts for most capacity through 2026.”

FSLR Price Action: Shares of First Solar had risen by 2.57% to $148.72 at the time of publication on Wednesday.

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