Truist Securities Initiates Coverage on First Solar with ‘Buy’ Rating, $300 Price Target

Truist Securities analyst Jordan Levy has initiated coverage on First Solar, Inc. (FSLR) with a bullish ‘Buy’ rating and a price target of $300. Levy believes First Solar is poised for significant growth, citing the company’s impressive technology, ongoing R&D investments, and substantial ‘contracted backlog’ as key factors driving its competitive advantage in the solar market.

Levy notes that while the broader utility-scale solar market faces some volatility, First Solar stands out as a long-term growth opportunity. This is particularly true given the rising demand for power from data centers, a trend that First Solar is well-positioned to capitalize on. Levy highlights First Solar’s ability to minimize short-term fluctuations, offering investors a compelling long-term growth profile.

First Solar’s ongoing technology enhancements are expected to further strengthen its position in the market, making its modules even more competitive against rivals. Levy projects an impressive $640 million in aggregate R&D spending from 2024 to 2026, demonstrating First Solar’s commitment to innovation. The analyst believes the company’s robust cash flow generation and ability to invest heavily in R&D will be invaluable both in the near term, driving tech improvements, and in the longer term, facilitating the development of next-generation solar modules.

Levy also emphasizes First Solar’s structural cost advantage per watt compared to traditional silicon module manufacturers. The company’s manufacturing process positions it as a leader in the U.S. solar market, especially as the push for domestic manufacturing gains momentum.

Looking ahead, Levy anticipates strong revenue growth for First Solar, with an estimated $4.426 billion in revenue for fiscal year 2024. He is optimistic about the company’s vertically integrated model and business strategy, which he believes will thrive in the current favorable regulatory environment.

First Solar shares surged by 4.1% to $251.6 at the close of trading on Thursday following the positive analyst report.

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