First Solar upgraded to Buy at BofA as IRA benefits 'unappreciated'

Aug. 26, 2022 9:23 AM ETFirst Solar, Inc. (FSLR)By: Carl Surran, SA News Editor17 Comments

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First Solar (NASDAQ:FSLR) +2.7% pre-market on Friday after Bank of America upgraded shares to Buy from Neutral with a $141 price target, raised from $104.50, saying the potential benefits from the recently passed Inflation Reduction Act are not yet priced into the stock price.

BofA's Julien Dumoulin-Smith said his conversations with First Solar (FSLR) management "lend confidence to baking in significant valuation uplift" from IRA solar credits.

The analyst believes the level of cash credits from the new law is "unappreciated" by Wall Street.

It is unclear how First Solar (FSLR) "would leverage this cash, though with stock buybacks and dividends unlikely, the only avenue in our view would be growth," Dumoulin-Smith wrote, seeing U.S. and global expansion or accretive M&A as "the likely decision tree."

First Solar (FSLR) shares have gained ~65% since Senator Joe Manchin reached the compromise that eventually became the Inflation Reduction Act.

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