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Deutsche analysts told investors in a note that the company delivered a “strong growth message over the next three years.”
“The company expects gross margin to improve from ~35% this year to over 60% by 2026e, while core gross margin (ex-IRA 45x credit) is expected to increase from ~20% close to 30% by ’26e,” the analysts said.
They believe the focus is heavily on cost control, with an emphasis on SG&A control, with the company not neglecting growth and ramp-up costs associated with production volumes growing at ~20% CAGR over the coming years.
“All-in, we walked away from the Analyst Day with a positive message, and we believe First Solar delivered what investors have been looking for – a strong 3-year roadmap, with improving numbers and core margins,” they concluded.
Elsewhere, KeyBanc analysts, who maintained a Sector Weight rating on the stock, said there were positive updates all around.
“In sum, the company translated its fully-sold-out-through-2026 capacity into a detailed outlook,” wrote the analysts. “This outlook is further underpinned by a substantially de-risked contract structure and solid technology roadmap.”
“Despite this strong outlook and formidable cash generation, we remain Sector Weight at this juncture as we mull the sustainability of the underlying pricing (sans U.S. tax credits) in light of significant U.S. capacity additions by competitors. Our notes and takeaways are summarized below.”
