First Solar Faces Pricing Pressure Amid High Inventory, Slow Project Starts, KeyBanc Says

01:45 PM EDT, 09/28/2026 (MT Newswires) -- First Solar (FSLR) faces medium-term pricing pressure due to factors including high US inventory levels and a sluggish pace of project starts, KeyBanc Capital Markets said in a note emailed Monday. "We continue to see meaningful fundamental challenges, including limited window of opportunity to capitalize on the recent polysilicon tariff protections, coupled with high levels of inventory on the ground in the US and slower projects starts downstream, which we believe will result in flat to declining pricing in the medium term," KeyBanc analysts Sophie Karp and Michael Pelletier said. In August, the US administration announced 15% tariffs on imports of polysilicon derivatives, alongside minimum import prices. Polysilicon is a key raw material used in solar panels and semiconductors. The Department of Commerce in September issued a rule preventing companies to stockpile polysilicon products. "With respect to our international manufacturing fleet, production planning and utilization levels in Malaysia and Vietnam continued to be influenced by US market demand drivers and economics, including the pending Section 232 polysilicon and derivatives investigation and tariffs," First Solar Chief Executive Mark Widmar said during the earnings call in late July. Greater policy transparency will help its 1.8 gigawatts of available international manufacturing capacity, Widmar said at the time. "In this environment, we continue to prioritize pricing, contract quality, appropriate risk allocation and long-term value over short-term bookings volume." Shares of the solar panel maker were down 2.4% intraday Monday and have fallen 34% this year. First Solar's stock has underperformed the broader S&P 500 index, which is up more than 12% year to date. KeyBanc upgraded its rating on First Solar to sector weight from underweight. The shares "now trade closer to our prior price target, leaving a more balanced risk and reward profile," KeyBanc's Karp and Pelletier wrote. "We view the rating change primarily as a valuation call rather than a shift in our fundamental outlook." First Solar reported a 4% annual drop in second-quarter revenue in July. Smart energy technology company SolarEdge Technologies (SEDG) returned to adjusted profitability for the first time since 2023 in the second quarter. The company guided for third-quarter revenue of $310 million to $340 million. Price: 173.52, Change: -4.19, Percent Change: -2.36