First Solar receives new buy rating amid 'American-made moat'

Investing.com -- First Solar (NASDAQ:FSLR ) has been given a new Buy rating by Truist, citing the company's strong competitive position due to its "American-made moat," which remains a "valuable differentiator."

Truist analysts set a price target of $300 for the solar module manufacturer, pointing to its innovation in thin-film Cadmium Telluride (CdTe) solar modules and its unmatched U.S. manufacturing footprint as key advantages.

According to Truist, First Solar's dominance in the U.S. utility-scale market is driven by its differentiated technology and strong domestic content, which protect its competitive edge.

"We believe FSLR's unmatched U.S. manufacturing footprint, leading domestic content & supply reliability will continue to protect the company's competitive moat," the firm said.

Additionally, they believe ongoing investments in research and development (R&D) will allow First Solar to remain ahead of competitors.

First Solar plans to invest approximately $4 billion between 2024 and 2026 to enhance its technology and build a new R&D facility.

The company's R&D spending is projected to reach $640 million during this period. Truist believes this will prove critical in maintaining First Solar's leadership, as it aims to improve module performance and develop next-generation technology.

Truist also highlighted the company's backlog of approximately 76GW, with orders extending as far as 2030, which helps the company navigate volatility in the solar market.

"We see FSLR as in a prime position to maintain meaningful growth despite near-term utility-scale market volatility," the analysts said.

While competition in U.S. solar manufacturing is rising, Truist believes First Solar's cost-efficient process and strong market position will enable it to thrive.

The firm concludes that First Solar is well-positioned to benefit from ongoing geopolitical tensions and the push for U.S. manufacturing.

Source: Investing.com