Thursday, September 21, 2023

"First Solar Urges US to Get Tough on Trade as Module Prices Sink" (FSLR)

In early regular trade the stock is down another $1.50 to $167.74.

From Bloomberg via Yahoo Finance, September 21:

The Biden administration needs to toughen trade enforcement to guard against unfair competition from Chinese solar suppliers as module prices plummet to record lows, according to the chief of the biggest US panel maker.

“If no one else wants to hold them accountable, I think the US needs to — for its own strategic rationale,” First Solar Inc. Chief Executive Officer Mark Widmar said in an interview Wednesday. “We need domestic capabilities, and renewable energy is one of them.”

The sweeping US climate law enacted last year already contains a raft of incentives meant to propel domestic solar manufacturing. And the US has imposed duties on some solar imports to offset allegations of unfair pricing and subsidies by China since 2011.

The US Commerce Department concluded last month that some manufacturers in Asia are illegally bypassing those tariffs. But a moratorium ordered by President Joe Biden put expanded duties on hold through June 6, 2024, in part to keep solar installations and climate goals on track while domestic production ramped up.

Solar panel prices have plunged as material costs have dropped with the addition of new polysilicon factories, returning the industry to a state of overcapacity. China has urged an end to US trade protectionism, saying it will disrupt the stability of supply chains and cooperation on climate change....


Sept. 14
Solar: "Polysilicon Price Trend"
Sept. 13
"Impact of overcapacity on solar stocks" (FSLR; SEDG; CSIQ; SPWR)
"First Solar Stock Rises After Analyst Day. What Wall Street Thinks." (FSLR)
....First Solar (ticker: FSLR) hosted its first analyst day since 2017 before the opening bell on Thursday, providing investors and Wall Street analysts with its cost cutting plans and technological investments for the next three years....
Looking at the five-year chart (from BigCharts) you can see why they didn't hold any "Analyst Days":

Until the Inflation Reduction Act was passed in 2022 there wasn't much to talk about.

However, as we saw in August's "First Solar, The Poster Child For Solar Subsidies Has Had An Awful Month (FSLR)": 

As the Wall Street Journal noted on July 31:

The U.S. Clean-Energy Company That Hit the Subsidies Jackpot

Of all the beneficiaries of the U.S.’s green-energy push, few have hit the jackpot like First Solar. The Arizona-based solar-panel manufacturer expects to receive as much as $710 million this year—nearly 90% of forecast operating profit—from subsidies the U.S. government rolled out a year ago to encourage domestic renewables production. One analyst estimates the incentives could be worth more than $10 billion for the company over the next decade. . .

The company’s shares have more than doubled to $208.40 in Friday trade since the beginning of 2022, despite a string of earnings disappointments during that period.... 

Which led yours truly to opine (a few minute to the open on Aug. 25, previous close $174.42):

As can be seen, the stock traded at $224.50 on July 28.

After the $50.08 (22.3%) decline the stock might be offering itself up for a trade to the long side but not today. In pre-market action the stock can only muster a 33 cent uptick on a day when all three major index futures are up going into the open.

FSLR will be reporting earnings in October so somewhere in the Aug. 28 - Oct. 26 time frame there should be an opportunity but we have no interest on JPow speech day and/or until the stock can find a bottom.

So, not exactly gamboling across the greenswards but perhaps searching for a bottom.
Sept. 6
Inflation: Time To Bail-Out The Inflation Reduction Act