First Solar stock is undervalued, Roth says

Ahead of the company’s fourth quarter results, Roth MKM analyst Philip Shen continues to think there is money to be made on First Solar (First Solar Stock Quote, Chart, News, Analysts, Financials NASDAQ:FSLR).

On February 27, after the market close, FSLR will report its Q4 and fiscal 2023 results.

“Heading into Q4, we remain bullish on FSLR. While bookings/bookings ASPs could be less robust in the near-term, we see more upside than downside risk with all the policies coming down the pike that will likely benefit FSLR including UFLPA Tier 2 enforcement, Auxin, 201 bifacial exemption removal, Rubio bill, NO GOTION Act, more tariffs, etc. After removing the $100/share of expected 45X benefit, FSLR trades at just ~10x our 2024E EPS ex-45X.”

In a research update to clients February 26, Shen maintained his “Buy” rating and price target of $230.00 on FSLR>

The analyst thinks FSLR will post EPS of $1.25 on revenue of $3.52-billion in fiscal 2023. He expects those numbers will improve to EPS of $4.46 on a topline of $4.63-billion the following year.

“FSLR has performed in-line with TAN since the Q3 call with both trading flat,” the analyst added. “We believe the stock remains decoupled from fundamentals and emphasize the value opportunity in shares,” the analyst added. “With our estimate of $100/share of 45X benefits priced in, the market is currently valuing the base business at ~$43, representing just ~10x our 2024E EPS ex-45X. It is worth noting that FSLR was a ~$70 stock before the IRA was even a possibility. At current levels, the market is implying that not only has FSLR’s base business seen no growth in over a year and a half, but has somehow contracted ~40% when fundamentals have only improved.”