According to Jeffries, the first solar is now “the only game in town” as there is a possibility of legislation passing by the Senate. Jeffries bought the first solar from hold, with a stock target of $192, up from $157 previously, and a close Tuesday up almost 17% from the stock’s $164.62 shares. It appears that the Senate will likely pass a law that will quickly phase out the Inflation Reduction Act tax credits for clean energy companies that have received “material support” from some foreign suppliers. This provision essentially covers the import of basic materials from China. According to Jefferies, this will trigger a temporary pullback for the utility-scale solar industry. However, according to Jeffries, the first solar will benefit as the average selling price of solar modules could be stronger as its products are increasingly manufactured in the US. “We believe the IRA will shape the netout for the FSLR…or at least it’s better than what’s thought,” an analyst led by Julien Dumoulin-Smith told clients in a memo released Wednesday. In another memo, Jeffries downgraded Sunrun from hold to poor performance, reducing its 12-month price target from $6 to $5. “The budget adjustments include residential solar in the chopping block. While there is expected improvements in the post-Senate IRA, Resi’s rise is limited and exposes it will run to both. [near term] and [long term] The Investment Bank wrote.
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