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    A Look At First Solar (FSLR) Valuation After BMO Capital Downgrade And Tesla Solar Expansion Concerns

    Simply Wall St·01/31/2026 00:32:54
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    BMO Capital’s downgrade of First Solar (FSLR), driven by concern over Tesla’s vertically integrated solar ambitions and potential pressure on module pricing, has sharpened investor focus on the company’s competitive position and valuation.

    See our latest analysis for First Solar.

    The recent analyst downgrades and concern over Tesla’s plans have coincided with a 30 day share price return of 13.67% decline and a year to date share price return of 17.80% decline. However, the 1 year total shareholder return of 34.62% suggests longer term holders have still seen solid gains, indicating that momentum has recently faded after a strong run.

    If this kind of volatility has you comparing options across clean energy and chips, it could be a useful moment to scan high growth tech and AI stocks as you think about where capital goes next.

    With First Solar now trading at a discount to both analysts’ average price target and some intrinsic value estimates, the question for you is simple: is this a reset that opens up upside, or is the market rightly pricing in future risks and growth?

    Most Popular Narrative: 19.9% Undervalued

    First Solar's most followed narrative pegs fair value at about $281.65, comfortably above the last close of $225.52, framing today’s pullback against a higher long run anchor.

    The company's rapid U.S. manufacturing capacity expansion (including new Alabama and Louisiana facilities coming online) positions it to leverage tax credits, reduce reliance on imports subjected to tariffs, and capture a premium for domestic content, which is expected to lift both revenue growth and operating margins as incremental capacity is utilized over the coming years.

    Read the complete narrative.

    Curious what has to happen for that higher value to make sense? The narrative leans on rising earnings, wider margins and a future profit multiple that is not excessive. Want to see which precise revenue path and profitability hurdle it assumes you are comfortable with before that fair value holds up?

    Result: Fair Value of $281.65 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, that upside case also leans heavily on U.S. policy support and assumes aggressive margin expansion, so any shift in incentives or tougher module competition could quickly challenge it.

    Find out about the key risks to this First Solar narrative.

    Build Your Own First Solar Narrative

    If you are not aligned with this view or prefer to lean on your own research, you can test different assumptions, adjust the inputs and Do it your way in just a few minutes.

    A great starting point for your First Solar research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

    Looking for more investment ideas?

    If you are weighing what comes next after First Solar, do not stop here; broaden your watchlist with focused stock ideas that match your style.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.