First Solar price target lowered to $188 from $230 at RBC Capital

RBC Capital lowered the firm’s price target on First Solar to $188 from $230 and keeps an Outperform rating on the shares. The firm cut clean energy estimates and price targets in response to the proposed Senate reconciliation bill. RBC’s base case assumes the bill passes with the current Senate proposed provisions. It lowered demand and margin assumptions for residential solar names based on the revised changes in the Senate bill reflecting residential solar lease restrictions and termination of 25D tax credits. For utility scale solar, the proposed repeal of the stacking provision under 45X tax credits limits the amount of credits First Solar (FSLR) could qualify for, the analyst tells investors in a research note. While the Senate proposed revisions are more favorable than the House version with the elimination of an accelerated start of construction requirement and more manageable Foreign Entity of Concern restrictions, the stacking provision restriction is more restrictive, RNC contends.