By Solar stocks are responding negatively to Donald Trump beating Kamala Harris to become the 47th President of the United States.
That’s because the new government is expected to rescind at least some parts of Biden’s Inflation Reduction Act, which many believed could prove to be a long-term tailwind for solar companies.
Still, there’s one stock within this space, First Solar Inc (NASDAQ: FSLR), that has the potential to buck the trend and outperform under a Trump presidency, as per Michael Blum – a Wells Fargo analyst.
First Solar stock is currently down more than 33% versus its year-to-date high in June.
Should you load up on First Solar shares?
Wells Fargo has an “overweight” rating on First Solar as it’s the largest solar panel manufacturer in the United States and, therefore, could “emerge a winner” once the dust settles.
The Nasdaq-listed firm benefits from domestic manufacturing tax credits that Michael Blum expects will remain in place even if Republicans go after the IRA as they support employment in GOP congressional districts.
Additionally, Donald Trump is broadly expected to raise tariffs on foreign goods that could help minimise competition for the likes of FSLR.
In particular, a planned 60% to 100% tax on China could serve as a meaningful tailwind for First Solar shares, according to the investment firm.
Wells Fargo expects this company based out of Tempe, Arizona to see an increase in bookings and average selling price in 2025.
Nonetheless, First Solar stock is not a suitable pick for income investors as it does not pay a dividend at writing.
First Solar stock has upside to $259
Michael Blum is not the only one among Wall Street analysts who’s keeping bullish on First Solar stock even though Americans have picked Donald Trump as their next president.
Dimple Gosai of the Bank of America Securities recommends loading up on shares of the solar panel manufacturer as well on its domestic manufacturing base. Her $259 price target on FSLR indicates potential for about a 30% upside from here.
“In our view, higher tariffs on imported solar panels would diminish competition from Chinese manufacturers, pushing demand towards First Solar’s US-made products,” she told clients in a recent research note.
BofA remains positive on First Solar even after it reported its financial results for the third quarter that fell shy of Street estimates.
The American manufacturer of solar panels cited lower module sales and product warranty reserve charge worth $50 million for the weakness in its fiscal Q3.
FSLR also lowered its guidance for the full year on October 29th “primarily due to three contract terminations and modules originally assumed to be sold this year.” It now expects $13 to $13.50 of per-share earnings on up to $3.25 billion in revenue in 2024.
But “these issues appear largely idiosyncratic,” as per Bank of America analyst Dimple Gosai.
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