First Solar is well positioned for growth despite the U.S. election uncertainty that has hit the company’s stock as well as the broader renewable industry in recent weeks, according to analysts. First Solar beat second-quarter estimates on Tuesday but left its guidance for the year unchanged as investors worry that Republicans could sweep the White House and Congress in November, putting Inflation Reduction Act tax credits at risk. The solar module manufacturer’s stock was up 5.7% on Wednesday. Shares are down 1.5% this month on election fears but have gained 29% this year as the deep-pocketed tech sector invests in renewables to power its energy-hungry data centers. FSLR YTD line FSLR CEO Mark Widmar said on the earnings call that solar companies faced growing constraints on capital access during the second quarter as investors wait to see how the election will shake out. First Solar is one of the biggest beneficiaries in the renewable energy space from production tax credits under the IRA. While election risk will weigh on First Solar’s stock, policy uncertainty tends to be a tailwind for the company, Goldman Sachs analyst Brian Lee told clients in a note. Goldman raised its 12-month price target by $9 to $311 per share, implying 47.5% upside from Tuesday’s close . “Looking ahead, FSLR remains in a position of strength to potentially benefit from ongoing uncertainties in the market as well as secular demand uplift from megatrends such as load growth largely driven by data center demand,” Lee told clients in his note. First Solar could actually benefit from a Republican victory , given former President Donald Trump’s plan to impose steep tariffs of 60% or more on China, according to Morgan Stanley. China tariffs could strengthen First Solar’s competitive position and pricing power in the U.S., analyst Andrew Percoco told clients. It is also unlikely that a Trump administration would repeal the domestic manufacturing tax credit that benefits First Solar because the credit has created jobs in Republican districts, according to Percoco. Morgan Stanley raised its price target by $1 to $332 per share, implying 57% upside from Tuesday’s close. There may be “a pause in the industry as developers try to get a better understanding of the policy environment, which could elongate the recognition of FSLR’s pricing power until either closer to, or shortly after, the election,” Percoco told clients. Regardless, the demand for utility-scale solar will be strong regardless of the election outcome, as electricity consumption rises from data centers , crypto mining, oil and gas electrification, and the expansion of domestic manufacturing, Percoco wrote. “This will require an increased buildout of new generation, much of which we expect to be met by renewables,” the analyst said.
