Bank of America upgraded shares of First Solar to a buy rating, saying Monday the stock's post-earnings sell-off is overdone. "On balance, we see more tailwinds than at any point in recent memory," the firm wrote in a note to clients. "On balance, the medium term update was one of the best we've seen of late in terms of panel pricing outlook," analysts led by Julien Dumoulin-Smith added. "This should sizably offsets both near term '21 pressures and provides a bridge to a LT outlook to next gen panel technology." Shares of First Solar slid 12.3% on Friday following the company's quarterly update on Thursday after the market closed. The company earned $1.96 per share on revenue of $803 million. Analysts surveyed by Refinitiv were expecting 98 cents per share and $773 million in revenue. Despite the top and bottom line beats, worries over lower module pricing and lower margins over the course of the year spooked investors. Looking forward, Bank of America said the company should benefit from President Joe Biden's infrastructure package, especially given the focus on "American Made." First Solar is the largest vertically integrated solar manufacturer in the United States. The company's early success with its Series 6 Copper Replaced product line should also fuel expansion into new markets, Bank of America said. "Bottom-line, we see investor concerns around '21 shipping and logistics headwinds as well as long-term tech concerns as overstated," the firm said. First Solar's U.S.-based operations also look attractive from an ESG standpoint due to labor supply concerns around the solar industry in China. Bank of America maintained its $91 target on shares of First Solar, which implies a 19% rally from Friday's closing price. Shares of First Solar slid 1% on Monday. - CNBC's Michael Bloom contributed reporting.
First Solar Inc.
Source: First Solar
Bank of America upgraded shares of First Solar to a buy rating, saying Monday the stock's post-earnings sell-off is overdone.
"On balance, we see more tailwinds than at any point in recent memory," the firm wrote in a note to clients.