S&P 500 component First Solar reported better-than-expected second-quarter earnings and revenue late Tuesday, with the company's profit growing more than 100%. First Solar also maintained its full-year guidance. FSLR shares angled higher Wednesday.
First Solar saw its Q2 EPS grow 104% to $3.25 while sales totaled $1.01 billion, a 25% increase compared to a year ago. Analyst consensus expected earnings of $2.71 per share with revenue coming in at $940 million.
"We are pleased with our financial and operational execution through the first half of this year as we continue to deliver on our commitments," Chief Executive Mark Widmar said in the earnings release Tuesday.
First Solar also kept its full-year outlook steady. In early May, the S&P 500 company forecast 2024 earnings of $13.00-$14.00. That would represent a gain of more than 67% compared to $7.74 per share in 2023.
First Solar also in May projected 2024 revenue of $4.4 billion-$4.6 billion, up more than 30% vs. 2023 levels. First Solar is sold out through 2026 with a backlog of 78 gigawatts extending through 2030.
Last week, Morgan Stanley analyst Andrew Percoco wrote that the perceived risk of a Republican president repealing the Inflation Reduction Act, or IRA, is "overblown." Percoco added that if former President Donald Trump wins the White House in 2024, increased tariffs on China could better position FSLR.
"In a scenario where Trump wins the 2024 election, we would expect FSLR to benefit from greater pricing, enabled by additional tariffs on solar equipment imported into the U.S., or even the perceived risk of incremental tariffs under a potential Trump administration," Percoco said.
Morgan Stanley has a 331 price target on FSLR. Excluding IRA credits, Morgan Stanley has a core equity value of 231 per share.
First Solar Stock Performance
FSLR rose 2.4% to 215.99, with a high of 227.50, during market action on Wednesday. First Solar stock declined 4.3% to 210.89 in Tuesday's market trade.
On Monday, the S&P 500 stock declined 2.8% to 220.40. The solar energy stock hit a 2024 high of 306.77 on June 12, but has retreated around 28% since then, finding resistance at its 50-day moving average. However, FSLR shares remain up nearly 30% on the year.
On July 22, Piper Sandler analyst Kashy Harrison raised the firm's price target on First Solar to 250 from 219 and kept an overweight rating on the shares. Harrison wrote that election uncertainty, interest rates and power demand should continue to drive volatility.
JPMorgan last week raised its target on First Solar to 282, up from 262. The firm also expects volatility to continue as investors "juggle strong underlying power demand with headwinds such as utility-scale project delays, still fragile residential demand, geopolitics and the U.S. election."
Meanwhile, Bank of America recently lowered its FSLR price target to 320, down from 331.
The IBD-tracked Energy-Solar industry group has dropped 9% this year after sinking 28% in 2023 as rising interest rates have challenged the industry. However, the group has climbed more than 150% since the U.S. imposed tariffs solar imports from China in 2018.
Meanwhile, backup generator manufacturer Generac reported better-than-expected second-quarter earnings while revenue came in slightly below predictions early Wednesday. The company's EPS jumped 25% to $1.35 with sales totaling $998 million, down less than 1% compared to a year ago.
For the full year, Generac forecasts revenue between $4.18 billion-$4.34 billion.
GNRC shares edged up 0.1% to 155.75, hitting 169.57 intraday, on Wednesday, advancing above a 155.35 cup-base buy point. Investors also could use 161.80 as a high handle entry.
First Solar stock ranks first in the Energy-Solar group. The S&P 500 component has an 82 Composite Rating out of a best-possible 99. FSLR shares also have an 86 Relative Strength Rating and an 82 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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