First Solar (NASDAQ: FSLR) shares dropped Monday following a downgrade by Citi to sell from neutral. The Wall Street firm cited a challenging long-term outlook for First Solar, which is up about 45% year to date.
The company said solar module supply/demand fundamentals “indicate a challenging long-term outlook for the company and may raise questions around the terminal value of the company’s assets.”
Global excess supply of polysilicon and PV modules should put downward pressure on module ASPs, limiting First Solar’s ability to contract volumes beyond 2026 at attractive prices, according to Citi analyst Vikram Bagri.
U.S. domestic module supply like will exceed demand starting in 2026, and exports may not be a viable option, given module prices outside the U.S. are significantly lower, Bagri said, adding that benefits from the Inflation Reduction Act are fully reflected in First Solar’s stock price.
First Solar’s”above-average revenue and earnings growth can drive the stock for above-average gains over the long term.”
Earnings are set for Thursday of this week.
First Solar is a leading American solar technology company and global provider of responsibly produced eco-efficient solar modules advancing the fight against climate change.
FSLR shares slid $13.66, or 6.3%, to $203.22.