The firm upgraded shares to overweight from neutral, citing an attractive risk-reward profile.
First Solar 's recent pullback has created an attractive entry point, according to JPMorgan. The residential solar energy company's stock has had a volatile year. After rallying approximately 55% from January to May, the stock has tumbled in recent weeks and is now trading near its January levels. First Solar, along with the broader clean energy market, has faced a crisis of confidence amid fears that higher interest rates will reduce demand for the sector.
"We believe the recent pullback tilts risk-reward favorably for a company that has the best visibility into medium-term growth prospects owing to a backlog that stretches into later this decade," said Strouse. To be sure, he noted that he believes there are still longer-term risks around the stock stemming from the new U.S.-based manufacturing, which has been incentivized by the Inflation Reduction Act's domestic content guidelines.
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