Truist Securities analyst Jordan Levy initiated the coverage on First Solar, Inc.
The company's technology, ongoing R&D investments, and substantial "contracted backlog" are key factors that strengthen First Solar's competitive edge for both current and future module technology advancements, Levy says.
While the broader utility-scale solar market remains volatile, First Solar presents investors with a compelling long-term growth profile, especially in light of rising data center power demand, all while minimizing short-term fluctuations, Levy writes.
Ongoing technology enhancements are expected to enhance the competitiveness of First Solar's modules compared to its peers, the analyst adds.
Further, Levy forecasts about $640 million in R&D spend in aggregate from 2024 to 2026.
Per the analyst, the company's strong cash flow generation & ability to invest heavily in R&D will prove invaluable both in terms of near-term tech improvements & longer-term next-gen modules.
The analyst views the company's manufacturing process as having a structural cost advantage per watt over traditional silicon module manufacturers.
With the ongoing push to onshore U.S. manufacturing, the company will "remain in the driver's seat" for U.S. module manufacturing.
For fiscal year 2024, Levy estimates the company to register revenues of $4.426 billion.
Overall, the analyst is e positive on the company's vertically integrated model and business strategy amid a favorable regulatory environment.
