First Solar shares target raised by Roth MKM on high demand outlook By Investing.com

On Friday, Roth/MKM maintained its Buy rating on First Solar (NASDAQ:) and increased the shares target to $320 from the previous $230.

The revision follows a recent webinar with the company’s CEO, Mark Widmar, and CFO, Alex Bradley, which provided insights into the company’s market outlook and operational strategies.

During the webinar held on May 29, the company’s leadership discussed several key factors that are anticipated to influence First Solar’s performance.

Notably, CEO Mark Widmar forecasted that the previously expected 25% compound annual growth rate (CAGR) in power demand from hyperscalers is likely to see a significant increase. This revision is based on the growing trend of companies requiring more computing power to handle large volumes of data.

Additionally, First Solar estimates that data centers could account for an impressive 40-50% of the utility-scale solar market, a substantial increase from the current estimate of around 20%. This shift is indicative of the growing role of renewable energy in powering large-scale data storage and processing facilities.

The company also observed that Power Purchase Agreement (PPA) pricing, which had previously bottomed out in the mid-to-upper $20s per megawatt-hour (MWh), has rebounded to between $50 and $60/MWh. This rebound suggests a strengthening market for solar energy and a positive outlook for First Solar’s revenue potential.

Furthermore, the CEO highlighted potential policy developments, noting the U.S. Administration’s plans to possibly address domestic content rules for wafers in future rulings. Such policy changes could affect First Solar’s operations and strategic planning.

First Solar is also engaging with customers to find the optimal mix of domestically and internationally manufactured Series 7 panels. This strategy aims to balance the benefits of local production with the efficiencies of global supply chains.

Lastly, the company indicated that any announcements regarding incremental expansion of U.S. capacity are unlikely to occur until after the upcoming election, signaling a cautious approach to scaling operations in the current political climate.

The election’s outcome could significantly impact the regulatory and business environment for renewable energy companies like First Solar.

InvestingPro Insights

In light of Roth/MKM’s recent upgrade of First Solar’s price target, it’s worth considering some additional metrics and insights provided by InvestingPro. With a robust Market Cap of approximately $29.63 billion and a P/E Ratio sitting at 28.56, First Solar exhibits signs of a solid investment option in the renewable energy sector. Notably, the company has demonstrated a strong Revenue Growth over the last twelve months as of Q1 2024, with an impressive 27.28% increase, highlighting its expanding market presence and operational success.

An InvestingPro Tip that aligns with the company’s positive outlook is analysts’ anticipation of sales growth in the current year. This aligns with the webinar insights about the growing demand from hyperscalers and the expected increase in utility-scale solar market share. Additionally, First Solar’s strategic financial positioning is reflected in another InvestingPro Tip, which notes that the company holds more cash than debt on its balance sheet, a reassuring sign for investors concerned about financial stability.

For those seeking more in-depth analysis, there are additional InvestingPro Tips available, which can be accessed by visiting the InvestingPro platform. Remember to use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore the wealth of data and insights that InvestingPro offers, including 14 more tips for First Solar.

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