An analyst hit First Solar with a downgrade Tuesday but also upped his price target, saying business at the company is at its best ever. FSLR stock sank.
Evercore ISI analyst Sean Morgan downgraded First Solar from outperform to in line, with his price target raised to 157, from 150.
FSLR stock had dropped 5% during morning trading but finished the day down 1.3% to 165.04 on the stock market today.
Business at First Solar has rallied thanks to the Inflation Reduction Act, Morgan said. He added that the act has renewed investor sentiment toward the solar industry.
"First Solar has been the major beneficiary of the Inflation Reduction Act and has outperformed our residential solar installer coverage by a wide margin since July 2022," Morgan wrote in a note to clients.
FSLR Stock: $369 Billion For Renewable Energy
Morgan went on to say: "However, with the capacity for First Solar largely sold out through 2025-2026, and current manufacturing volume expansion already factored into our model, we are beginning to see the benefits of the (inflation act) and its (production tax credit) provisions being largely reflected in the current FSLR share price."
President Joe Biden signed the Inflation Reduction Act into law last year. It provides $369 billion for expansion of renewable energy.
In addition, it stands as the largest federal-government spending plan on alternative energy in U.S. history. One of its major goals centers around expanding U.S. solar panel manufacturing.
Through Monday's close, FSLR stock has climbed 11.7% this year.
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