Why JP Morgan Isn’t Worried About Senate Bill’s ‘Mild Negative’ Impact on First Solar Stock

First Solar (FSLR) is under pressure following a sharp sell-off driven by proposed U.S. legislation that could phase out key renewable energy tax credits. Despite the setback, J.P. Morgan remains supportive of the solar giant, downplaying the impact of the Senate bill as only a “mild negative.” The firm believes First Solar’s long-term fundamentals remain intact, even amid shifting policy winds.

U.S. solar stocks took a major hit on Tuesday after a Senate panel proposed ending solar and wind tax credits by 2028 as part of revisions to President Donald Trump’s broad tax-and-spending package. Notably, FSLR stock drooped by 19%, while shares of solar inverter maker Enphase Energy (ENPH) plunged 27.2%, making them among the worst performers on the S&P 500.

JP Morgan Stands by First Solar

Following the draft bill, J.P. Morgan analysts stated that it would slightly reduce the benefits of clean energy tax credits compared to the current law, but it’s still better than the House version passed in May.

Additionally, the firm noted that investors had high hopes after a recent broker report hinted at more generous changes, so some clean energy stocks might drop if the final bill doesn’t meet those expectations. The firm sees large-scale utility projects as the best positioned within the sector, especially with improved rules in the Senate version around project timelines and restrictions on foreign suppliers.

Overall, J.P. Morgan believes the Senate bill as better than the House version for the clean energy sector. It could still support higher prices for U.S.-made products, although it’s a “mild negative” for First Solar if foreign competitors also qualify.

What Is the Price Target for FSLR?

Turning to Wall Street, FSLR stock has a Strong Buy consensus rating based on 23 Buys and three Holds assigned in the last three months. Also, the average First Solar stock price target of $211.79 implies a 47% upside potential from current levels.

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