First Solar sinks 15% as Q1 sales, bookings fall more than expected
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First Solar (NASDAQ:FSLR) is the S&P 500's biggest loser in Friday's trading, -14.7% to a two-month low, as Q1 sales plunged compared to the prior quarter, with analysts noting weakening momentum in bookings.
First Solar (FSLR) said its bookings growth fell by a third Q/Q in Q1 to 9.9 GW from 14.5 GW, and Morgan Stanley's Andrew Perceco said he is concerned that "customers will be more hesitant to sign long-term contracts as U.S. manufacturing expands meaningfully and the prevalence of domestic panel suppliers increases."
But Perceco - who rates the stock at Underweight with a $200 price target - also noted ASP trends "remain quite robust, as is evidenced by the $0.318/W ASP on the 4.8 GW of backlog signed" since the Q4 2022 earnings call.
Analysts also pointed out First Solar (FSLR) maintained its guidance for the full year due to the timing of contractual delivery schedules, timing of first sales of Series 7 modules, and timing of recognition of IRA credits.
On Thursday's post-earnings conference call, First Solar (FSLR) CEO said the company is waiting for guidance from the U.S. Treasury Department on the Inflation Reduction Act's domestic content bonus provision.
J.P. Morgan analyst Mark Strouse said IRA guidelines could be released within the next 1-2 months, which should provide a catalyst for First Solar (FSLR) stock.
"We believe more restrictive guidelines on the definition of a U.S.-made solar module would be a positive for FSLR and likely result in the company announcing further manufacturing expansion soon thereafter, with a longer runway before competitors potentially enter," Strouse wrote, but "less restrictive guidelines would be a negative... likely encouraging more competition sooner, and likely leading to a material slowdown" in First Solar's bookings volume and average selling prices.
This has been a rough week for stocks in the solar sector (TAN), and SolarEdge Technologies (SEDG) -4.4%, SunPower (SPWR) -3.3%, Enphase Energy (ENPH) -1.8% in Friday's trading. 
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SA analysis: First Solar Has Flown Too Close To The Sun And Should Be Avoided
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