New York, Jan 7, 2026, 13:34 ET — Regular session
- First Solar shares fell about 10% after Jefferies cut the stock to “Hold” and lowered its price target to $260
- The brokerage said investors are pricing in too much policy upside for 2026 as booking visibility weakens
- Attention shifts to the next earnings update for signs on orders, pricing and margins
Shares of First Solar (FSLR.O) fell about 10% on Wednesday after Jefferies downgraded the U.S. solar module maker to “Hold,” warning that expectations for 2026 are running ahead of what the company can likely deliver. The stock was down 9.9% at $242.05 in afternoon trading.
The downgrade lands after a strong rally late last year that pushed the stock close to a 52-week high, leaving little room for surprises in a sector that still trades on policy headlines. First Solar ended Tuesday at $268.78, about 6% below its 52-week high of $285.99. 1
Jefferies said the policy story investors have leaned on for 2026 “look[s] richer than the likely reality,” and argued that optimism around potential Section 232 tariffs could “underwhelm.” It added that visibility into 2026 bookings remains limited after a difficult 2025 that included guidance cuts, de-bookings and margin pressure. 2
The brokerage set a $260 price target and said the stock trades near peak multiples at about 8.8 times 2026 EV/EBITDA — a valuation yardstick that compares enterprise value to cash earnings. Jefferies also pointed to the risk that carve-outs for Germany and other trading partners could dilute any pricing lift from tariffs.
Jefferies said that excluding Section 45X manufacturing tax credits, First Solar posted gross margins of about 20% in 2024 and could exit 2025 closer to 11%, weighed down by logistics costs. It flagged underutilisation at overseas facilities as a risk and said relocating 3.7 gigawatts of Southeast Asia capacity to the U.S. could bring non-cash underutilisation charges, while reciprocal tariffs in India may further disrupt volumes.
Other solar names traded lower but moved less than First Solar. Sunrun fell about 6%, while SolarEdge and Enphase slipped around 1%–2% in the same session.
Jefferies analyst Julien Dumoulin-Smith described expectations as “richer than reality,” pointing to prior order cancellations that have weighed on bookings visibility. On its last earnings call, First Solar said it had terminated 6.6 gigawatts of bookings under multiyear agreements defaulted on by affiliates of BP, taking total de-bookings since the prior call to 6.9 gigawatts. 3
The risk for bulls is that trade rules and tax-credit guidance do not tighten in the way investors expect, leaving pricing power short of what the market has been discounting. More de-bookings, or a slower pace of new contracts, would keep the focus on utilisation and margins rather than policy.
Investors now look to the next results for updates on bookings, pricing and 2026 margin assumptions. First Solar is expected to report around Feb. 24, according to Nasdaq data. 4
