Why First Solar Stock Burned Shareholders on Thursday

Shares of solar panel manufacturer First Solar (NASDAQ: FSLR) are down more than 9% headed into Thursday's close, upended by an analyst's lowered price target, the second such revision this week. Another solar power stock was also sent markedly lower today by a different analyst's downward price target adjustment for related reasons.

Falling price targets

Although Jefferies analyst Dushyant Ailani still considers First Solar stock a buy, he lowered his price target from $271 to $266 on concerns that the company's upcoming third-quarter results could be disappointing. Ailani's specifically concerned by labor shortages and supply chain challenges that could ultimately postpone revenue for the solar panel maker.

These worries echo those voiced by Bank of America analysts on Tuesday. While BofA also remains bullish on First Solar in the long run, it, too, believes near-term complications will stymie the company's results. Bank of America dialed back its price target for First Solar shares from $343 to $321.

The stock might be able to shrug off one or the other of these voiced concerns. Together though, there's too much worry for investors to ignore.

Separately but simultaneously, Roth MKM analyst Philip Shen lowered his price target for solar power equipment maker Enphase Energy from $140 to $130 on Thursday. Although Shen's chief concern is Enphase's deteriorating share of the battery/storage market, the market may be viewing it as reason for more sweeping concerns regarding the broad solar power business. Enphase Energy shares are down about 6% today.

A buying opportunity

The knee-jerk sell-off makes enough sense on the surface. And to be fair, analysts' short-term concerns aren't unreasonable. The global solar power industry is bumping into something of a headwind right now. It could crimp near-term results.

Don't sweat the headlines and the subsequent setbacks too much, though.

Solar power remains an integral, growing part of the planet's future energy production. The U.S. Department of Energy still believes 2024's worldwide photovoltaic panel installations will be about one-third better above 2023's tally despite the logistical headwind, underscoring its rapid growth that's expected to remain in place for many more years. That's why today's tumble to 33% below June's high is an attractive entry point into First Solar shares, as long as you're truly long-term-minded. Indeed, even both of this week's lowered price targets are still well above First Solar stock's current price.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America, Enphase Energy, and Jefferies Financial Group. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.