First Solar Will Hold Its First Analyst Day in 5 Years. What to Expect.

Solar stocks pushed higher last year, driven by excitement surrounding the 2022 Inflation Reduction Act. The legislation—which provides homeowners with incentives to purchase solar panels—raised hopes for increased solar demand.

More recently, however, solar companies have faced some headwinds. Higher interest rates have made it more expensive to finance large purchases like solar panels. In addition, regulatory changes in California decrease how much money solar users get from putting excess energy into the grid.

For its part,
First Solar
reported strong second-quarter financial results in July. The company’s earnings and revenue came in above Wall Street expectations, mostly driven by increased sales volumes and higher average selling prices. That bucked the trend of other solar stocks that had cut guidance on waning demand.

The company also said on its earnings call that it is expanding by creating its fifth manufacturing facility in the U.S.. CEO Mark Widmar said the decision was “driven by compelling market fundamentals, supportive trade and industrial policies, and robust customer demand.”

Shares of First Solar have climbed 20% in 2023 to $179.15 after surging 72% in 2022.

Baird Equity analyst Ben Kallo expects the analyst day will provide investors with long-term margin targets and details of technological advancements.

“FSLR’s most recent analyst day in 2017 highlighted its differentiation from a technology, balance sheet, and brand perspective,” Kallo wrote in a research note Sept. 1. “Since then it has progressed along its technology roadmap, further strengthened its balance sheet, and simplified the business model which we expect will be points of emphasis once again.”

Kallo calls the company his “favorite name in the solar space,” with an Outperform rating and $229 price target on the stock.

Morgan Stanley analyst Andrew Percoco also has confidence in the company heading into the event. He upgraded the First Solar to Equal Weight from Underweight and raised his price target to $206 from $180 on Wednesday. He said in a research note that the company’s contract backlog “de-risks its earnings profile through 2026, which we think warrants a premium multiple vs. peers.”

Write to Angela Palumbo at [email protected]