Analyst change and price-target revision
Baird lowered its rating on First Solar (NASDAQ:FSLR) to Neutral from Outperform and reduced its price target to $205 from $264. The brokerage made the move following the company’s mixed fourth-quarter performance and what it described as uncertain signals about future results during the quarterly earnings discussion.
Why the downgrade
Baird’s downgrade reflects a combination of results that did not wholly satisfy expectations and commentary from First Solar management that the firm interpreted as incrementally negative. Although First Solar’s 2026 guidance broadly matched Baird’s prior preview, remarks on the earnings call created additional caution for the analyst team.
Key financial results
First Solar reported fourth-quarter revenue of $1.68 billion, ahead of the analyst consensus of $1.57 billion and up from $1.59 billion in the prior quarter. For the full year 2025, revenue totaled $5.2 billion, an increase from $4.2 billion in 2024, a rise the company attributed largely to a 24% increase in third-party module volume.
Despite the top-line beat, adjusted earnings per share were $4.84, below the analyst estimate of $5.15. Additionally, the company’s revenue guidance for 2026 came in significantly below what analysts had been modeling, a gap that contributed to Baird’s more cautious stance.
Backlog and booking caution
First Solar continues to report a strong backlog, but management signaled reluctance to commit to new bookings while several external variables remain unresolved. Specifically, the company cited outstanding questions around Section 232, the need for clarity on FEOC, and the broader global tariff landscape. Those policy and trade uncertainties are weighing on decision-making around new contracts and capacity deployment.
Market positioning and valuation notes
The company has a market capitalization of $26.1 billion and trades at a price-to-earnings ratio of 19. Shares have risen roughly 65% over the past year, though they are down about 6.9% year-to-date. Baird expects the shares to trade lower in the near term given the company’s guidance that fell short of consensus and the multiple remaining unknowns in the forward outlook.
Separately, InvestingPro analysis cited in the context of the company’s results indicates First Solar appears undervalued relative to its calculated Fair Value, placing it among names on that platform’s list of most undervalued stocks. That assessment sits alongside Baird’s cautionary view, reflecting differing perspectives on near-term uncertainty versus longer-term valuation.
Sector context
The solar panel manufacturer remains engaged in navigating a complex regulatory and trade environment while managing existing orders and evaluating future business opportunities. The interplay between policy clarity and contract booking will likely shape both near-term deployment decisions and investor sentiment.
Bottom line
Baird’s shift to a Neutral rating and the lower price target reflect concerns rooted in management commentary, below-consensus 2026 revenue guidance and unresolved regulatory variables, even as First Solar delivered revenue above expectations and maintains a substantial backlog.