What Happened?
Shares of solar panel manufacturer First Solar (NASDAQ: FSLR) fell 10% in the morning session after Jefferies downgraded the stock to 'Hold' from 'Buy' and lowered its price target to $260 from $269.
The analyst firm, led by Julien Dumoulin-Smith, pointed to several reasons for the change in outlook. Jefferies expressed caution due to limited visibility into the company's bookings for 2026, which raised uncertainty about future sales. The downgrade also reflected concerns about potential margin pressure and questions surrounding the company's long-term strategic direction. According to the report, given these execution and margin risks, combined with a full valuation, the firm saw little room for the stock's price to appreciate further in the near term.
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What Is The Market Telling Us
First Solar’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. But moves this big are rare even for First Solar and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 6.3% on the news that the stock pulled back due to valuation concerns as it hit a 52-week high. The decline followed a recent surge where the stock reached a new 52-week high of $281.87. Analysis indicated that the company traded at a high price-to-earnings (P/E) ratio relative to its near-term earnings growth. This suggested the shares may have become overvalued at those higher levels, which likely prompted some investors to sell and take profits.
First Solar is down 12% since the beginning of the year, and at $241.50 per share, it is trading 15.1% below its 52-week high of $284.59 from December 2025. Investors who bought $1,000 worth of First Solar’s shares 5 years ago would now be looking at an investment worth $2,289.
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