Bank of America downgrades First Solar, says climate bill benefits are already priced in

The upside tailwinds are fading for First Solar after its solid run in the wake of the Inflation Reduction Act’s passage , Bank of America said. Analyst Julien Dumoulin-Smith downgraded shares of the solar stock to a neutral from a buy rating, saying that catalysts from the climate bill are already priced into shares. “Between the outperformance of the shares and weakness in global solar prices of late, the favorable drivers are largely embedded,” he wrote in a Thursday note to clients. FSLR mountain 2022-08-16 First Solar shares are up more than 50% since the passage of the Inflation Reduction Act. Shares fell about 1.5% before the bell. The bill, geared toward promoting clean energy, offers a slew of tax credits for homeowners and consumers to support climate-friendly initiatives. In the months since President Joe Biden signed the bill into law, First Solar announced plans to spend roughly $1.1 billion on a new panel factory in Alabama to meet growing demand . But since the climate bill’s passage in August, First Solar shares have soared more than 50%, making the upside for shares “less compelling,” said Dumoulin-Smith. The stock surged 72% in 2022 alone and is already up more than 20% in the new year. Meanwhile, the recent decline in solar prices increase risks of a slowdown in bookings and pricing momentum, he added. “Given higher risk and positive drivers priced-in, FSLR trades at balanced risk/reward supporting Neutral rating,” Dumoulin-Smith wrote. The bank’s $195 price target implies 8% upside from Wednesday’s close. — CNBC’s Michael Bloom contributed reporting