Key Takeaways:
First Solar Inc. shares climbed 5% to $236.52 on Monday after Wells Fargo raised its price target to $320 from $255, citing asymmetric upside from a pending US trade ruling on imported polysilicon.
"The market underappreciates Section 232 polysilicon," analyst Praneeth Satish said in a note, reiterating an Overweight rating. "A favorable ruling could materially raise US solar pricing and support significant earnings upside."
The new target implies 42% upside from Thursday's close of $225 and aligns with First Solar's 52-week high of $320.95. Satish's call assumes a successful Section 232 outcome would add $0.09 per watt to average selling prices on 2028 and later bookings. The stock remains 9% lower year to date despite the rally.
The US Department of Commerce launched the Section 232 investigation into imported polysilicon in July 2025, with a decision expected by early August. Polysilicon, the foundational material for solar cells, is predominantly produced in China. A ruling that imports do not pose a national security threat would widen access to the material and create a tailwind for First Solar, the largest US solar panel manufacturer.
Peers rallied alongside First Solar without company-specific catalysts. SolarEdge Technologies jumped 8% to $56.58, Canadian Solar gained 7% to $15.41, and Enphase Energy rose 5% to $45.32. The Invesco Solar ETF added 3% to $57.85.
First Solar's fundamentals support the bullish call. The company reported Q1 2026 earnings per share of $3.22 on revenue of $1.04 billion, both ahead of estimates, and reaffirmed full-year net sales guidance of $4.9 billion to $5.2 billion. Its 47.9 GW contracted backlog and cadmium telluride thin-film technology keep it structurally independent from Chinese crystalline silicon supply chains.
Not all sell-side analysts share the optimism. Bernstein maintains an Underperform rating with a $217 target, arguing First Solar's profitability depends heavily on government tax credits that could shift with future policy changes. The stock trades at 14 times forward earnings.
Of the 42 analysts covering First Solar, 25 rate it a buy or strong buy, according to LSEG data.
The Section 232 polysilicon decision due by early August is the next hard catalyst for the group. A favorable ruling could reprice the entire US solar stack, while an unfavorable outcome would leave First Solar reliant on existing tax credit support. Investors will watch whether the stock holds above $235 and whether the broader solar ETF confirms Monday's breakout with follow-through buying.
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