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First Photo voltaic (FSLR) shares tanked greater than 10% on Jan. 7 after senior Jefferies analyst Julien Dumoulin-Smith downgraded the Tempe-headquartered clear power firm to “Maintain.”
Dumoulin-Smith cited considerations about restricted visibility into 2026 bookings and diminished coverage tailwinds following latest legislative adjustments.
Margin strain from logistics prices and potential facility underutilization may additionally weigh on the photo voltaic inventory this yr, he added.
Regardless of this decline, nevertheless, First Photo voltaic shares stay up some 100% versus their 52-week low.
FSLR inventory is at present buying and selling at a lovely ahead price-earnings (P/E) a number of of 11.54x and maintains a robust stability sheet with bettering free money stream.
However this basic power is being offset by near-term headwinds that warrant warning in taking part in it at present ranges, the Jefferies analyst argued in his analysis observe.
These embrace the corporate’s heavy reliance on tax credit for margin help, which has turn into a vulnerability below President Donald Trump.
First Photo voltaic’s gross margins deteriorated to about 11% in 2025 from a staggering 20% a yr earlier. Plus, common promoting costs are conserving roughly flat, indicating pricing energy stays restricted within the present aggressive panorama as effectively.
One other main challenge is FSLR’s book-to-bill ratio that at present stands at about 0.5x solely coupled with latest cancellations from a serious BP (BP) affiliate that expose counterparty dangers and counsel softer demand.
Furthermore, the clear power firm’s administration continued to decrease its steering by means of 2025, additional exposing the fragility of earlier demand assumptions.
The truth is, analysts now see First Photo voltaic’s income conserving flat on a year-over-year foundation in 2026.
What’s additionally price mentioning is that traditionally, the Nasdaq-listed agency has misplaced 1.20% on common in February. The seasonal pattern makes First Photo voltaic inventory even much less enticing to personal at present ranges.
Whereas FSLR inventory slipped below key transferring common (50-day) on Wednesday, signaling continued bearish momentum forward, different Wall Road corporations appear to disagree with Jefferies on the photo voltaic firm.
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