Why the first solar stock burned shareholders on Thursday

Solar Panel Manufacturer Actions First Solar (FSLR -9.29%) are down more than 9% before Thursday’s close, changed by an analyst’s lowered price target, the second such revision this week. Another solar stock was also sent significantly lower today by another analyst’s downward price target adjustment for related reasons.

Falling prices

Although Jefferies analyst Dushyant Ailani still considers First Solar shares a buy, he cut his price target from $271 to $266, given that the company’s third-quarter results could be disappointing. Ailani is particularly concerned about labor shortages and supply chain challenges that could ultimately delay the solar panel maker’s revenue.

These concerns echo those expressed by Bank of America analysts on Tuesday. While BofA also remains bullish on First Solar over the long term, it also believes that near-term complications will hamper the company’s results. Bank of America cut its price target on shares of First Solar from $343 to $321.

Actions may be able to shrug off one or another of these expressed concerns. Taken together, however, there are too many worries for investors to ignore.

Separately, but simultaneously, Roth MKM analyst Philip Shen lowered his price target for the solar equipment maker Enphase Energy from $140 to $130 on Thursday. While Shen’s main concern is the deterioration of Enphase’s share of the battery/storage market, the market may see it as a reason for larger concerns about the solar business. Shares of Enphase Energy are down about 6% today.

A buying opportunity

Knee-jerk selling makes enough sense on the surface. And to be fair, analysts’ near-term concerns are not unreasonable. The global solar industry it is hitting a headwind right now. It TO the ripple of short-term results.

Don’t sweat the headlines and subsequent failures too much, though.

Solar power remains an integral, growing part of the planet’s future energy production. The US Department of Energy still believes that 2024 solar panel installations worldwide will be about a third better than the 2023 number, despite headwinds, underscoring its rapid growth, which is expected to remain in place for many years That’s why today’s drop to 33% below the June high is an attractive entry point into First Solar stock, as long as you have a truly long-term mind. Indeed, even both of this week’s cut price targets are still well above First Solar’s current share price.