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First Solar (NASDAQ:FSLR) shares were upgraded from Underweight to Equal-weight by a Morgan Stanley analyst on Thursday.
First Solar shares are up more than 2% during the session.
The analyst, who also increased the price target on First Solar shares from $54 to $136, said they are increasing growth rates for solar, wind, energy storage, and clean hydrogen, as well as raising price targets on many clean tech stocks due to the clean energy support featured in the new IRA legislation.
“The Inflation Reduction Act (IRA), recently passed by Congress and signed by President Biden, will in our view accelerate the decarbonization of the U.S. economy, lead to significant increased domestic manufacturing, and provide the necessary support to jump-start decarbonization technologies that are on the cusp of being commercially viable,” said the analyst.
Morgan Stanley increased growth rate estimates for every U.S. decarbonization technology and also increased price targets for associated companies.
On First Solar, the analyst stated: “Our large price target increase is driven primarily by the benefits to FSLR from the IRA (significant subsidy for domestic solar panel manufacturing), which we estimate adds $69/shr of equity value, as well as by our more rapid projected growth in U.S. solar deployments. We see continued healthy — and growing — margins for FSLR, but in the long term, we remain concerned about the degree of competition from efficient, large scale Asian panel manufacturers, which is the biggest driver keeping us at Equal-weight rather than Overweight.”
