Jefferies Bullish on First Solar (FSLR): ‘Time to Buy the Dip’ as Solar Sector Heats Up

Wall Street''s flipping the switch on solar again—Jefferies just upgraded First Solar (FSLR) with a conviction call: ''It’s time to get constructive.''

Why now? The analysts see a perfect storm—policy tailwinds, supply chain normalization, and that sweet spot where institutional FOMO meets undervalued tech. No specifics on price targets (typical hedge fund vagueness), but the subtext screams ''asymmetric upside.''

Cynical aside: Funny how upgrades always follow a 30% haircut. Almost like someone needs liquidity before the next earnings call.

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In fact, Smith sees upside to the estimates if new market pricing increases to the $0.32 to $0.33 per watt range for new contracts, with First Solar well-positioned to command a premium.

While Smith sees solid pricing and clearer policy support for U.S.-based solar makers, he downgraded Sunrun (RUN) stock to Sell from Hold due to rising risks in the residential solar market.

Jefferies Turns Bullish on FSLR Stock

Smith is the most constructive on the utility-scale solar sector, with the Inflation Reduction Act (IRA) “still shaking out at the Senate level.” The Senate appears likely to pass legislation that WOULD quickly phase out IRA tax credits for clean energy companies that receive significant assistance from some foreign suppliers. The provision essentially targets imports of basic materials from China. The analyst added that the Foreign Entity of Concern (FEOC) restrictions introduced by the House bill position FSLR as the “sole winner” among original equipment manufacturers (OEMs) of solar modules for the U.S. market.

Smith contends that this change will likely spark a temporary pullback for the utility-scale solar industry. However, he expects First Solar to gain from this policy, as its products are increasingly manufactured in the U.S. The analyst expects the company to gain from robust average selling prices for solar modules as a result of the restrictions.

He is bullish on First Solar due to its exposure to utility-scale and solid backlog that shields it from the long-term volatility inherent in the sector. Notably, FSLR is well-positioned to benefit from its impressive backlog of about 66 GW, of which 52 GW is specifically for U.S.-made modules.

Is FSLR a Good Stock to Buy?

Overall, First Solar stock scores a Strong Buy consensus rating based on 23 Buys, two Holds, and one Sell recommendation. The average FSLR stock price target of $211.79 indicates 26.2% upside potential.