Shares of solar panel manufacturer First Solar slid over 8% on Thursday after Jefferies lowered the firm’s price target citing potential delays and lower volumes.
Jefferies brought its price target down to $266 from $271 while keeping a ‘Buy’ rating on the stock, noting that it expects the focus this earnings season to be on potential delays for "myriad reasons.”
Going into the third quarter, the brokerage expects volume to come in lower than consensus. It has also lowered its volume estimates for 2025 and 2026 to 8% and 4% below consensus, respectively. Although Jefferies anticipates near-term challenges, it remains confident on average selling price upside.
The brokerage also does not expect significant backlog additions in the third quarter. "We estimate a total backlog addition of 2GW in 3Q compared to a consensus of 3.2GW. We expect the momentum to resume in the first half of 2025,” it said according to a report.
Despite the price target reduction, retail sentiment on Stocktwits inched up higher into the ‘extremely bullish’ territory (95/100) from the ‘bullish’ zone.
First Solar has been in the news lately as it inaugurated its new $1.1 billion fully vertically integrated thin-film solar manufacturing facility in Lawrence County, Alabama.
The facility adds 3.5 gigawatts (GW) of fully vertically integrated nameplate solar manufacturing capacity in the United States and is expected to create over 800 new energy technology manufacturing jobs in the state.
First Solar is scheduled to release its third-quarter results on Oct. 29, 2024. During the second-quarter earnings, the firm had maintained its 2024 guidance, with net sales expected to come in at $4.4 billion to $4.6 billion and operating income estimated at $1.5 billion to $1.6 billion.
Shares of the firm have gained nearly 21% since the beginning of the year. Some Stocktwits users believe the stock is currently undervalued.
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