First Solar Slides to 235th in Trading Volume as Analysts Clash Over Tariff Uncertainties and Expansion Risks

Market Snapshot

On January 12, 2026, First Solar (FSLR) closed with a 0.35% decline, adding to a broader trend of volatility in the solar sector. Trading volume for the day stood at $0.51 billion, a 43.12% drop compared to the prior day’s activity, placing the stock at the 235th rank in terms of trading volume across the market. The subdued volume suggests reduced investor participation, potentially reflecting mixed signals from analysts and market participants. Despite the recent decline, FSLR remains within a range where analysts have assigned varied price targets, with some institutions maintaining bullish outlooks while others express caution.

Key Drivers

Analyst Ratings and Price Target Revisions

The stock’s performance in early January 2026 was heavily influenced by conflicting analyst ratings and revised price targets. Bank of America (BofA) raised its price target for FSLR to $291 from $255 on January 9, maintaining a “Buy” rating. This adjustment was part of BofA’s broader reassessment of the solar sector, which it described as transitioning from a “solar-beta cycle” to a “stock-picker’s cycle,” emphasizing individual company performance over sector-wide trends. Guggenheim also raised its target to $312 from $289 on January 8, while keeping a “Buy” rating. However, these optimistic revisions were partially offset by Jefferies’ downgrade on January 7, which lowered its target to $260 from $269 and switched to a “Hold” rating. Jefferies cited concerns about limited booking visibility, strategic uncertainties, and potential underperformance of anticipated Section 232 tariff benefits due to carve-outs for Germany. The mixed signals created a tug-of-war in market sentiment, contributing to the stock’s muted performance.

Trade Policy Uncertainties

A recurring theme in the news coverage was the potential impact of U.S. trade policy, particularly the Section 232 tariffs. While some analysts viewed these tariffs as a tailwind for FSLR’s domestic manufacturing operations, others highlighted risks. Jefferies noted that developers might accelerate projects ahead of tariff implementations, potentially diluting long-term pricing benefits. Additionally, the possibility of Germany being exempted from certain tariff provisions could reduce the competitive advantage for U.S.-based solar manufacturers like First Solar. These uncertainties underscored the sector’s vulnerability to geopolitical shifts, complicating long-term investment decisions.

Expansion and Strategic Moves

First Solar’s capital expenditures also drew attention, with the company opening a $1.1 billion manufacturing facility in Louisiana and planning a $330 million plant in South Carolina. These expansions, expected to add over 7 gigawatts of annual production capacity and create 1,400 jobs, signaled the company’s commitment to scaling its U.S. operations. BofA’s revised valuation methodology, which included refining peer comparisons to focus on module manufacturers, reflected confidence in FSLR’s competitive positioning. However, the effectiveness of these investments in driving profitability remains contingent on securing high-margin contracts, as the company faces challenges from BP’s contract terminations and a broader sector slowdown in 2025.

Legal and Operational Risks

A separate development on January 7 involved a class-action investigation by Pomerantz LLP, triggered by Jefferies’ downgrade and the stock’s 10.29% plunge on January 7, 2026. The firm alleged potential securities fraud related to First Solar’s 2025 performance, including guidance cuts, de-bookings, and margin compression. While the investigation is ongoing, such legal risks could weigh on investor confidence, particularly as the company navigates a complex regulatory environment in the renewable energy sector.

Sector-Wide Valuation Dynamics

Valuation metrics further contextualized the stock’s position. First Solar currently trades at an EV/EBITDA multiple of 12.5x and a P/E ratio of 18.95, slightly below its fair value estimate. BofA’s blended valuation approach, combining discounted cash flow and peer-based metrics, highlighted the company’s potential for growth but also underscored the need for improved operational visibility. Analysts noted that the stock’s performance would hinge on its ability to execute expansion plans, secure favorable contracts, and navigate trade policy developments.

In summary, First Solar’s stock movement in early 2026 was shaped by a mix of analyst optimism, trade policy uncertainties, strategic investments, and emerging legal risks. While the company’s long-term prospects remain tied to the renewable energy boom, near-term volatility is likely to persist as it addresses operational and regulatory challenges.