First Solar cut at BofA as Section 201 tariffs not likely to be extended
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First Solar (FSLR
-6%) slides as Bank of America downgraded shares to Neutral from Buy with a $91 price target, trimmed from $114, citing the rising likelihood that tariffs on bifacial panels that had protected the company will not be extended, which could flood the U.S. market with cheap imported panels.
"With Section 201 potentially not applying to the majority of U.S. imports, First Solar's pricing power may erode," nullifying potential upside from a backlog that likely will remain robust, BofA's Julien Dumoulin-Smith writes.
While First Solar is "more insulated from inflationary pressures elsewhere with disruption for c-Si competitors, it has its own idiosyncratic aluminum and adhesive headwinds" that adds further margin pressures, Dumoulin-Smith says.
Update: California Public Utilities Commission President Alice Reynolds reportedly has asked for more time to review and consider revisions to a proposal that would cut incentives for residential rooftop solar systems in the state.
Solar stocks are down across the board, including MAXN
-8.3%, NOVA
-8.1%, ARRY
-6.8%, SHLS
-5.5%, DQ
-5.1%, SPWR
-4.6%, JKS
-4.6%, ENPH
-4.3%, CSIQ
-2.6%.
ETF: TAN
-3.4%.
SolarEdge (SEDG
-2.9%) is slipping despite winning an upgrade to Buy at Needham, and Sunrun (RUN
-7.5%) plunges near 52-week lows as the same firm slashed its stock price target by 40%.