First Solar Stock Sinks After Price Target Cut by Jefferies

Key Takeaways

• Shares of solar power companies slumped Thursday when Jefferies lowered its price target on First Solar, warning about its current-quarter profit.

• Jefferies said in a research report that potential delays will lead to lower volumes for First Solar.

• The analysts cut their price target for First Solar to $266 from $271, but maintained their "buy" rating.

First Solar (FSLR) was the worst performer in the S&P 500 intraday Thursday, with shares plunging 10%, after securities analysts at Jefferies lowered their price target on concerns that delays will negatively affect its current-quarter results.

Jefferies dropped its price outlook for First Solar to $266 from $271, while maintaining a "buy" rating.

In a note to clients, the analysts said they expect First Solar earnings to slightly miss estimates as product volumes come in lower than anticipated. They pointed to "potential delays for myriad reasons, impact on module pricing from AD/CVD [anti-dumping and countervailing duties] determinations and thoughts on selling excess Indian capacity into US."

Solar-Power Growth Remains 'Challenged'

The analysts noted that utility-scale solar-power growth "continues to be challenged by delays due to long interconnection queues, supply-chain, and labor shortages." They added that this trend will continue into next year "with some level of project push outs as delays extend from weeks to months."

However, the analysts said that they remain bullish on First Solar's outlook "despite near-term challenges to execution."

The Jefferies report also sent shares of other solar companies, such as Enphase Energy (ENPH) and SolarEdge Technologies (SEDG), lower Thursday. Enphase shares recently declined almost 6%, while those of SolarEdge were about 5% lower.

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