Shares of solar panel manufacturer First solar energy (NASDAQ: FSLR) are down more than 9% heading into Thursday’s close, driven by an analyst’s lowered price target, the second such revision this week. Another solar stock was also sent significantly lower today by another analyst’s downward price target adjustment for related reasons.
Falling price targets
Although Jefferies Analyst Dushyant Ailani still considers First Solar shares a buy. He lowered his price target to $266 from $271 as he feared the company’s upcoming third-quarter results could be disappointing. Ailani is particularly concerned about labor shortages and supply chain challenges that could ultimately delay revenues for the solar panel manufacturer.
These concerns reflect those of Bank of America analysts Tuesday. While BofA also remains optimistic about First Solar in the long term, it also believes that short-term complications will hamper the company’s results. Bank of America lowered its price target on First Solar shares from $343 to $321.
The stock may be able to shake off any of these raised concerns. All told, though, there’s too much concern for investors to ignore.
Separately but simultaneously, Roth MKM analyst Philip Shen lowered his price target for the solar equipment maker Enphase energy from $140 to $130 on Thursday. While Shen’s primary concern is Enphase’s deteriorating share of the battery/storage market, the market may see this as a reason for larger concerns regarding the broader solar sector. Shares of Enphase Energy are down about 6% today.
A purchasing opportunity
The knee-jerk sell-off makes sense at first glance. And to be fair, analysts’ near-term concerns are not unreasonable. The global solar industry is are currently facing headwinds. It could short-term results shrink.
However, don’t worry too much about the headlines and subsequent setbacks.
Solar energy remains an integral and growing part of the planet’s future energy production. The U.S. Department of Energy still believes that global photovoltaic panel installations in 2024 will be about a third better than in 2023, despite logistics headwinds, underscoring the rapid growth expected to continue for many years to come. That’s why today’s drop to 33% below the June high is an attractive entry point into First Solar shares, as long as you’re truly focused on the long term. Even both of this week’s lowered price targets are still well above the current First Solar share price.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. James Brumley has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Bank of America, Enphase Energy, and Jefferies Financial Group. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.
Why First Solar Stock Burned Shareholders on Thursday was originally published by The Motley Fool
