First Solar stock upgrade signals potential rebound on stronger U.S. solar demand

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First Solar stock upgrade signals rebound

Highlights

Truist Securities upgrades First Solar to buy from hold, raising its price target to $270 from $229, indicating about 52% potential upside.
Truist forecasts U.S. utility-scale solar demand averaging 44 GWdc from 2027-35E, with First Solar's Series 7 capacity sold out through 2028, suggesting upward pricing pressure for bookings later in the decade.
Section 232 restrictions on polysilicon imports, effective December 4, reduce stockpiling risks and support higher-priced contracting opportunities for domestic solar makers like First Solar.

Truist upgrade highlights pricing and demand outlook

As reported by CNBC, Truist Securities raises its rating on First Solar to buy from hold and lifts its price target to $270 from $229, implying about 52% upside from Friday's close. Analyst Christopher Souther says the call reflects a stronger backdrop for pricing into the 2030s and a recent reset in the company's valuation.

Souther says Truist's U.S. utility-scale solar forecast, averaging 44 GWdc in 2027-35E, supports a firmer demand outlook for First Solar. He adds that a recent anti-stockpiling measure tied to the Section 232 ruling improves near-term demand conditions and could strengthen pricing for new bookings later in the decade.

According to the note, First Solar's order book has already set near-term pricing because U.S. Series 7 capacity is sold out through 2028. Truist says bookings for the end of the decade are likely to carry an upward pricing bias, creating added upside for the company from 2027 onward.

U.S. trade measures may support domestic solar makers

The stock has fallen about 32% year to date as macroeconomic pressure, including rising tariffs, weighs on sentiment toward the sector. Truist argues that temporary U.S. restrictions on imports of polysilicon and related derivatives under Section 232, effective Dec. 4, could give First Solar additional support.

Polysilicon is a key input used to make about 95% of solar panels, according to the U.S. Department of Labor. Truist says the temporary ruling also reduces the risk that foreign suppliers stockpile inventory with importers, a factor the bank sees as helpful for balancing near-term demand and supporting higher-priced contracting opportunities in the U.S. market.

Wall Street's broader view remains constructive on the company. LSEG data shows 29 of the 41 analysts covering First Solar rate the stock buy or strong buy, aligning Truist's call with the prevailing market consensus.

In our earlier coverage of India’s solar power curtailment, we examined how the country was discarding a noticeable share of solar generation during peak-demand months because grid and operational constraints prevented the electricity from being absorbed. We also noted that the mismatch came even as power demand hit records and coal inventories tightened, underscoring how infrastructure bottlenecks can distort the supply-demand balance in solar-heavy systems.

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