Stocks were muted this morning after yesterday afternoon’s reversal. The major averages were lifted by Fed Chair Powell’s reassurance that current inflation will be temporary and managed to cut early losses to finish green. Continued gains could give the S&P 500 the 0.2% boost it needs to join the Nasdaq in record territory.
Solar stocks got slammed in May due to the impact of supply chain bottlenecks and parts shortages, but the sector seems to be gaining strength in June as the move toward renewable energy is becoming more mainstream in the U.S. and especially internationally.
Rapidly declining installation costs and increasing demand across the public and private sector could send solar stocks on an upward path for years to come. Business Insights projects that the $163 billion global solar industry will reach $195 billion by 2027, exhibiting a CAGR of 6%.
Our trade alert for today highlights a standout from the solar industry with a proven reputation and a very bright future. The stock looks like it’s trading at a value today, but it might not be for long.
First Solar Inc. (FSLR) is a leader in the solar industry and unlike many burgeoning solar companies, they have a rock solid balance sheet that can handle the challenges of an economic downturn.
FSLR’s thin film modules employ advanced technology which has helped the company cut costs and pass some of the savings onto its customers. The company’s objective is to reduce the cost of solar electricity to levels that compete on a non-subsidized basis with the price of retail electricity in key markets throughout the world.
Due to a stable client base, First Solar performed very well in 2020. Despite the challenges of the pandemic, they had a backlog of orders throughout 2020 and their share price rose more than 80%. However, the share price has dipped in 2021, which means now may be a great time to buy FSLR stock at a reduced price point.
There is plenty of upside in the sector and plenty of room for growth. Overall, solar energy only accounts for around 2% of the total grid usage right now. That number is primed to go up and First Solar is preparing for growing demand. Earlier this month, company execs announced plans for a third factory in Ohio that will effectively double its production capacity.
With a current P/E ratio of just 16, FSLR stock seems like a value when compared to the industry average P/E of 47. Over the past month, FSLR has only gained around 4% which, in comparison to the solar industry’s monthly gain of almost 10%, is an indicator that the stock has plenty of runway ahead.
The 14 analysts offering 12-month price forecasts for First Solar Inc. have a median target of $85, which represents an increase around 11% from its current price.
Solar power isn’t going anywhere anytime soon, which means continued growth can be expected in the long term. FSLR has a proven track record and their balance sheet speaks volumes about the company’s solid management.
Where to invest $1,000 right now...
Before you consider buying First Solar, you'll want to see this.
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And it's not First Solar.
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Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.
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But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.
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