U.S. panel manufacturer First Solar is uniquely positioned to benefit from the recently passed Inflation Reduction Act, Evercore ISI said as it upgraded the stock to an outperform rating. “First Solar is well positioned to benefit from the Inflation Reduction Act, from both the increased demand side and the supply side benefits,” the firm said Wednesday evening in a note to clients. The IRA is the largest climate bill in U.S. history and includes incentives aimed at spurring renewable energy buildout in the country and encouraging domestic manufacturing. Evercore’s analysts led by Sean Morgan noted that First Solar can take advantage of both, given that it’s the largest — and one of the few — U.S. manufacturers. At the end of August the company announced a new U.S. factory, with CEO Mark Widmar telling CNBC that the IRA was the key catalyst that made First Solar choose the U.S. for the new site. The newly announced plant — the exact location of which has yet to be announced — will be the solar company’s fourth fully integrated U.S. factory. Shares of First Solar have gained nearly 80% since July 27 when Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V, said they reached an agreement on a climate package. The stock has largely avoided the widespread selling taking place in the broader market. Shares have roughly doubled in price since late June. The Invesco Solar Fund , which tracks the space, has largely given up its gain since July 27 — up just 1% after initially surging into August. Evercore’s Morgan also significantly raised his target on the stock from $88 to $150. However, the new forecast is only about 13% above where the stock traded Thursday. The firm added that given First Solar’s domestic footprint the company could benefit from trade restrictions on Chinese solar modules. “In our view, First Solar, which faces cost competitive competition in solar panels in the U.S. and the EU, from Chinese and China adjacent Asian countries, would benefit from increased trade barriers to foreign Chinese competition,” Morgan said. Evercore is not the only Wall Street firm to note the benefits for First Solar from the IRA. Earlier in September, Goldman Sachs upgraded the stock to a buy rating . “On the demand front, we see FSLR as one of the best levered to US demand tailwinds within our solar panel supplier coverage as the US accounts for roughly 80% of the company’s revenue,” the firm said in a Sept. 7 note to clients. Shares of First Solar dipped more than 2% Thursday. – CNBC’s Michael Bloom contributed reporting.
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