Solar stocks are reacting negatively to Donald Trump’s victory over Kamala Harris as the 47th president of the United States.
The new government is expected rescind some parts of Biden’s Inflation Reduction Act. Many believed that this could be a long term tailwind for solar companies.
Michael Blum, a Wells Fargo Analyst, says that First Solar Inc. (NASDAQ: FSLR) is one stock in this sector that could outperform the market under a Trump administration.
First Solar’s stock is currently down by more than 33% from its June high.
Should you buy First Solar shares?
Wells Fargo gives First Solar an “overweight rating” because it is the largest solar panel producer in the United States. It could therefore “emerge as a winner” when the dust settles.
Michael Blum believes that domestic manufacturing tax credits will continue to be available even if Republicans attack the IRA in order to support employment in GOP congressional district.
Additionally, Donald Trump will likely raise tariffs on imported goods which could help reduce competition for FSLR.
According to the investment firm, a planned tax of 60% to 100% on China could be a significant tailwind for First Solar’s shares.
Wells Fargo anticipates that this Tempe, Arizona-based company will see an increase in bookings as well as in the average selling price by 2025.
First Solar is not an ideal investment for income investors, as it does no pay a dividend.
First Solar stock can rise to $259
Michael Blum isn’t the only Wall Street analyst who is bullish on First Solar despite the fact that Americans have chosen Donald Trump to be their next president.
Dimple Gosai of Bank of America Securities recommends that you buy shares of the solar panels manufacturer and its domestic manufacturing base. Her $259 price goal on FSLR suggests a potential 30% increase from here.
In a recent research report, she told clients that, “In our opinion, higher tariffs on imported panels would diminish the competition from Chinese manufacturers and push demand towards First Solar’s US-made product.”
BofA is still positive about First Solar, even though its financial results for the quarter fell short of Street expectations.
The American manufacturer of solar panels cited lower module sales as well as a product warranty reserve charge of $50 million to explain its weakness in the fiscal Q3 quarter.
FSLR also lowered their guidance for the entire year on October 29 th, “primarily due to contract terminations and modules that were originally assumed to be purchased this year.” They now expect $13 to $13.50 per share on revenues up to $3.25 Billion in 2024.
Dimple Gosai, an analyst at Bank of America, says that “these issues seem largely idiosyncratic.”
This post, Why this solar stock is still a good buy despite Trump’s victory, may be updated as new information becomes available.
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