First solar stock rebounds as energy demand rises

Prima Solar Inc. NASDAQ: FSLR is a leading manufacturer of thin-film photovoltaic (PV) solar panels. Solar Energy Stocks Had a Difficult 2023, But Will Heat Up Again in 2024 Invesco Solar ETF NYSEARCA: TANNING it is down 41.5% over the past year. However, it pared losses by 14.2% year to date (YTD). First Solar is starting to see increasing demand thanks to federal grants from the Inflation Reduction Act.

Federal solar tax credits under the Residential Clean Energy Credit are income tax credits that can reduce the price of solar installation by 30%. This incentive can mean a $6,000 tax credit on a $20,000 solar installation on a primary or secondary residence. This oil/energy sector could see a reprieve from the sell-off in 2024.

Thin film and crystalline panels

First Solar is the leader in thin-film solar panels. There are mainly three types of photovoltaic solar panels. Crystalline silicon panels are made of monocrystalline panels, which are the most expensive, with an efficiency above 19% and are best suited for users with limited roof space. Polycrystalline is the mid-priced choice when space is not limited, with an average efficiency of 15% to 17%.

Thin film panels are made from cadmium telluride (CdTe) or copper indium gallium selenide (CIGS) which is the cheapest option. It typically has an efficiency of less than 15% and is ideal for large commercial and industrial roofs. Thin film tends to perform better in low light conditions and is more cost-effective for business customers. SunPower Corporation NASDAQ: SPWR it makes its own monocrystalline panels called Maxeon, which it claims are the most efficient solar panels on the market. Obtain AI-powered insights on MarketBeat.

Improving fundamentals at First Solar

First Solar reported a fourth-quarter 2023 EPS beat of 11 cents, coming in at $3.25 versus consensus analyst estimates of $3.11. Revenue rose 15.5% year over year to $1.16 billion, below consensus estimates of $1.31 billion. Full-year 2023 net income was $7.74 per share. Net bookings for the full year were 28.3 GW. First Solar ended 2023 with $1.6 billion in cash, up from its previous guidance of $1.3 billion.

Mixed guidance for First Solar

First Solar provided in-line guidance for full-year 2024. It expects EPS of $13.00 to $14.00 versus consensus estimates of $13.25. The volume sold is expected between 15.6 GW and 16.3 GW. Operating profit is expected to be between $1.5 billion and $1.6 billion, including production start-up costs of $85 million to $90 million. Underutilization costs associated with the factory ramp are expected to be between $40 million and $60 million. Section 45X tax credits are expected to be between $1 billion and $1.05 billion. The cash balance for year-end 2024 is expected to be between $900 million and $1.2 billion.

The first insights from Solar’s CEO

First Solar CEO Mark Widmar noted that this is the company’s 25th^th anniversary, making it one of the oldest and most experienced solar module manufacturers in the world. It produced and shipped record module volumes and its order book grew to historic levels of 80.1 GW. The company added 10 new customers, securing 28.3 GW of net bookings at a base ASP of more than 31.8 cents per watt.

Capacity expanding to 25 GW by 2026

The company has expanded its manufacturing capacity, investing $1.1 billion in a new plant in Louisiana, which is expected to add 3.5 GW to its nameplate capacity in 2026. Combined with manufacturing facilities in Alabama and Ohio, it expects year-end 2026 nameplate capacity to increase. grow up to 14 GW nationally and a further 11 GW internationally, for a total of 25 GW.

Widmar commented: “Over the past year, we have expanded manufacturing capacity, mobilized our latest announced facility in Louisiana, produced and shipped a record volume of modules, expanded our order backlog to historic levels, increased investment in research and development and continued to evolve our technology and product roadmap.”

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First breakout of the daily solar symmetric triangle

The daily candlestick chart on FSLR indicates a symmetrical triangle breakout pattern. The upper descending trend line started at $177.89 on January 2, 2024. The lower ascending trend line formed at the swing low of $135.88 on February 5, 2024. The breakout occurred one week after the release of the Q4 2023 earnings when shares staged a rally through the upper trend line on January 2, 2024. March 6, 2024.

The daily relative strength index (RSI) increased to the 60 band. The pullback support levels are at $156.88, $151.32, $141.76, and $135.88.

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