BMO raises First Solar (FSLR.US) price target to $263: Misjudged due to 232 tariffs, order and profit improvements may facilitate revaluation

According to Golden Ten Data APP, BMO Capital has upgraded the stock rating of solar panel manufacturer First Solar (FSLR.US) from “Market Perform” to “Outperform,” raising the target price from $237 to $263. This target price offers approximately 25% upside compared to the stock’s Thursday closing price of $210.10.

BMO noted that following the implementation of Section 232 of the US Trade Expansion Act, First Solar’s share price has dropped roughly 16%, an excessive decline. Analyst Ameet Thakkar stated that the rating upgrade is mainly based on three factors: first, the company’s valuation is attractive after Section 232 comes into effect; second, there’s room for order re-rating in the coming years; third, the threat posed by Tesla has already been fully priced in by the market. In his view, the impact of these three factors will outweigh the temporary profit margin trough expected between 2026 and 2027.

The analyst explained that the 15% tariff and minimum import price policy stipulated by Section 232 should lead to stable long-term US solar module prices at $0.43 to $0.44 per watt. First Solar’s production capacity has actually been sold out until 2028, so the company is expected to improve its order shipment ratio in the coming quarters, with the average selling price (ASP) significantly rising, even though profit margin headwinds may persist until 2027.

The analyst added that this rating upgrade reflects an increasingly favorable pricing environment for domestically produced US solar modules, which should help First Solar increase its order shipment ratio, expand long-term profit margins, and drive a significant EBITDA growth after available capacity comes online in 2029.