First Solar (FSLR.O): Off to the Races; Reiterate Buy/H

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31 Jul 2026 02:22:58 ET │ 15 pages

First Solar (FSLR.O)

Off to the Races; Reiterate Buy/H

CITI'S TAKE

Positive. FSLR reiterated FY26 guidance despite tariff and freight

headwinds, reiterated that domestic capacity is largely sold-out through

2028, that backlog extends into 2030, and disclosed ~4GW of NT domestic

booking opportunities. Initial CuRe adjuster notifications pave the way for

pricing upside in 2027/28. While freight costs have increased from

~$1.5¢/W earlier this year to $2.3¢/W, we understand that at least part of

the increase was due to higher miles driven. Timing and implementation of

232 remains uncertain, though FSLR remains in contact with USTR/DOC

and is optimistic about a favorable outcome. We expect bookings to remain

relatively modest until the outcome, as some customers are still on the

sidelines. Expect FSLR to outperform today given guidance reaffirmation

despite higher freight/logistics, lack of bear thesis into 3Q earnings, and a

Section 232 outcome on the horizon. See note for callback takeaways.

The Good — 1) Adjusted EBITDA of $644mm in 2Q exceeded the $500mm guidance

high end, driven by higher 45x, but also by an ~$89mm IEEPA benefit, 2) US

bookings of ~1.9GW were made at a healthy ~$0.36¢/W incl adjusters, 3) FSLR has

~2GW of potential orders currently in contract subject to CP and another 2GW with

high probability of booking by YE, 4) CuRe notifications went out, indicating upside

to revenues in 2027/28, and 5) S6 perovskite pilot line is on track for 1H27.

n

Buy / High Risk

Short-Term View: Upside

Price (30 Jul 26 16:00)

US$206.01

Target price

US$297.00↑

from US$294.00

Expected share price return

44.2%

Expected dividend yield

0.0%

Expected total return

44.2%

Market Cap

US$22,136M

Price Performance

(RIC: FSLR.O, BB: FSLR US)

The Not So Good — 1) Backlog declined from 47.9GW in 1Q to 45.1GW in 2Q, 2)

~1.8GW of international capacity is being underutilized pending 232 outcome, 3)

Phase 2 of SC finishing capacity was pushed to mid-2027, 4) Freight costs have

increased from ~1.5¢/W to 2.3¢/W driven by higher trucking costs, and 5) Section

301 investigation into excess capacity is a looming risk.

EPS (US$)

Q1

Q2

Q3

Q4

FY

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