Listed on NASDAQ as FSLR in the Alternate Energy Industrial Sector
First Solar, Inc. is an American manufacturer of solar panels, and a provider of utility-scale PV power plants and supporting services that include finance, construction, maintenance, and end-of-life panel recycling.
Over the past two years or so, the clean energy sector has been a major laggard with investors giving it a wide berth. The iShares Global Clean Energy ETF (ICLN), a catch-all bet on clean energy, is trading 36% below its January 2021 all-time high after a major rally fuelled by ESG optimism drove many stocks in the sector to record highs and stratospheric valuations.
The renewable energy sector is having to contend with yet another formidable foe: rising interest rates. Renewable energy projects tend to be sensitive to high interest rates due to their high upfront costs and long useful lives. Rising interest rates makes future cash flows less valuable thus lowering the value of renewable energy projects. That’s a big reason why renewable energy stocks have continued performing poorly.
That said, there’s a standout industry in this sea of mediocrity: the solar sector. Solar stocks have been on steady climb from their May lows after the sector received a series of positive catalysts.
First off, news emerged in July that China is considering a $220B stimulus package to shore up its sluggish economy followed shortly by the U.S. and Canada announcing a memorandum of understanding that would lift tariffs on Canadian solar products. But the biggest and most important development was the passing of the historic climate bill dubbed the Inflation Reduction Act (IRA) in August.
The alternate energy sector with reference to the solar sector has grown red-hot after a White House statement said the U.S. is on track to triple domestic solar manufacturing capacity by 2024: First Solar Inc. (NASDAQ: FSLR) stock has soared 56% since the IRA was passed in August 2022. (ENPHASE- another of the underlying’s of this Note climbed 35% for same period).
The current Bloomberg Analyst forecast for First Solar has an impressive combined 95.8% Buy/Hold and with a positive 12-month forward target pricing forecast.