First Solar’s stock extends rocket ride after BofA upgrades, boosts price target by 66%

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Shares of First Solar Inc. FSLR, +1.27% climbed 1.3% toward an eight-month high in afternoon trading Monday, after BofA Securities analyst Julien Dumoulin-Smith backed away from his bearish stance on the solar power systems company, citing upbeat policy developments and pricing potential. Dumoulin-Smith raised his rating to neutral from underperform, and boosted his stock price target by 66%, to $104.50 from $63.00. The upgrade follows the surprise agreement among Democrats on the Inflation Reduction Act (IRA), which earmarks $369 billion on energy and climate change initiatives. The stock has rocketed 30.9% since the agreement has been announced. Meanwhile, Domulin-Smith said there is still policy risk, as First Solar’s profitability is predicated on “continued protectionist policy” which includes the Uyghur Forced Labor Participation Act (UFLPA) signed into law in December 2021, which prohibits importation of cheaper goods from China made with forced labor. “While IRA implies significant NT earnings uplift, we are Neutral on share of FSLR as policy uncertainty implies both elevated upside and downside risks,” Domoulin-Smith wrote in a note to clients. First Solar’s stock has run up 37.6% over the past three months while the S&P 500 SPX, -0.26% has slipped 0.7%.

This article was originally published by Marketwatch.com. Read the original article here.

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