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JPMorgan downgrades First Solar, cites stock’s recent outperformance following climate bill passage


First Solar ‘s stock is due for a much-needed breather following its outperformance in the wake of the Inflation Reduction Act being passed, according to JPMorgan. The stock’s up more than 150% in the last five months and 97% in 2022. The Inflation Reduction Act was signed by President Joe Biden on Aug. 16. While the move is warranted, analyst Mark Strouse downgraded shares to neutral from overweight, saying the stock now trades at a premium when the bank expects it to perform in line with the mean of its coverage area. He also trimmed the bank’s price target to $147 from $190 a share. “We view FSLR as the biggest near/medium-term beneficiary from the IRA’s domestic manufacturing tax credits; however, with the stock up > 120% over the past four months, we believe the “easy money” has now been made,” he said. To be sure, Strouse views First Solar as one of the biggest beneficiaries of the IRA in the not-too-distant future, but “easy money has likely been made.” “We expect bookings to remain strong and therefore believe existing holders should maintain positions, though with an expected uptick in manufacturing capacity announcements from competitors in FY23, we expect the pace of FSLR’s multiple re-rating to slow,” he wrote. Shares slumped nearly 3% before the bell on the downgrade. The new price target implies a 14% downside from Friday’s close. — CNBC’s Michael Bloom contributed reporting

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