First Solar upgraded, named as a best idea at Wells Fargo

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First Solar (NASDAQ:FSLR) +4.5% in Friday's trading after Wells Fargo upgraded shares to Overweight from Equal Weight with a $188 price target, up from $146 previously, and called the company one of the firm's best ideas for 2023 along with Array Technologies (ARRY) and SolarEdge Technologies (SEDG).

The Inflation Reduction Act is a "game changer" for First Solar (FSLR) that should drive acceleration adoption of solar and hydrogen in the U.S. for the next decade, and the full benefit of the legislation is not fully captured in the stock price, Wells Fargo analyst Michael Blum said, also upgrading Sunnova Energy (NYSE:NOVA) and Sunrun (NASDAQ:RUN).

"While continued Fed tightening in early 2023 will likely act as a near-term headwind, the fundamental and regulatory backdrop is much improved in 2023 and beyond" for solar stocks, according to Blum; ETF: (TAN).

The analyst prefers solar exposure over hydrogen because of solar's "better economics and strong underlying demand," prompting downgrades of Bloom Energy (BE) to Equal weight and Ballard Power Systems (BLDP) to Underweight.

First Solar (FSLR) is positioned to significantly increase its revenue by 20%-25% in 2023, and is set to return to margins that should help it return to historical profitability levels, The Value Analyst writes in an analysis newly posted on Seeking Alpha.