Dj Canadian Solar Price Target Announced At $14.15/Share By Jefferies

First Solar Inc.’s FSLR shares have plunged 21.2% in the past three months, underperforming the Zacks solar industry’s decline of 6.3% as well as the S&P 500’s return of 5.2%. However, it has outpaced the broader Zacks Oil-Energy sector’s loss of 31.7% in the same time frame.

Other heavyweight solar stocks like Canadian Solar CSIQ, Enphase Energy ENPH and SolarEdge Technologies SEDG also performed poorly at the bourses, as evident from their share price loss of 16.1%, 48.3% and 62.7%, respectively, in the past three months.

With solar photovoltaic (PV) expected to become the foremost renewable electricity source by 2030, as per a report published by the International Energy Agency in October 2024, clean energy investors, particularly those interested in solar, might see this as an opportunity to buy FSLR, considering its relatively lower share price and long-term growth potential.

However, to assert if it would be prudent to add FSLR stock to your portfolio right now or wait a little longer, let’s delve deeper. This should help us understand what led to the stock’s decline and if there’s any risk to investing in the same.

What Caused FSLR Stock’s Recent Downfall?

First Solar has been grappling with some challenges in recent times, like the manufacturing issues affecting certain of its Series 7 modules manufactured in 2023 and 2024. This may cause the modules to experience premature power loss once installed in the field. Based on the currently available information and certain assumptions and estimates, First Solar expects aggregate losses related to these manufacturing issues to range between $50 million and $100 million. This might adversely impact its operational results in the near future.

Moreover, the company has recently lowered its sales guidance for 2024, taking into account the termination of the Plug Power contract as well as unfavorable average selling prices of its modules in some markets, particularly India. First Solar has also narrowed its earnings guidance for the year.

These might have been the primary factors that caused investors to lose interest in this stock lately, which was duly reflected in its share price loss over the past three months, as mentioned above.

Will FSLR Stock Recover Anytime Soon?

Soaring solar energy demand has been encouraging module producers like First Solar to enhance their manufacturing capabilities. The company manufactured a record 3.8 gigawatts (GW) in the third quarter of 2024 and sold 3 GW solar modules. Such solid module shipments resulted in FSLR registering a 10.8% year-over-year improvement in its third-quarter sales.

As the largest solar PV manufacturer in the Western Hemisphere, First Solar continues to expand and invest in its manufacturing capacity to register similar sales growth in the coming quarters as well. Notably, the company is currently in the process of expanding its manufacturing capacity by approximately 5.8 GW, which should enable FSLR to duly meet its production target of 15.6-15.9 GW and sell 14.2-14.6 GW solar modules (by 2024-end). This can be expected to bolster First Solar’s operational results significantly.

The consensus estimate for FSLR’s long-term (three to five years) earnings growth rate is pegged at 43.4%.

A quick sneak peek at FSLR’s near-term earnings and sales estimates mirrors similar improvement trends.

Estimates for FSLR Stock Send Mixed Impulse

The Zacks Consensus Estimate for fourth-quarter revenues and earnings reflects a solid improvement of 27.7% and 47.1%, respectively, from the prior-year level.

The annual estimate figures also indicate a similar picture. The Zacks Consensus Estimate for 2024 earnings indicates an improvement of 70.5% from the 2023 level, while that for revenues implies a surge of 25.5%. Its 2025 estimates also reflect similar growth trends. However, the downward revision in its earnings estimate reflects investors’ loss of confidence in this stock lately.

Enerflex (EFXT) came out with quarterly earnings of $0.09 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this energy infrastructure provider would post earnings of $0.06 per share when it actually produced earnings of $0.04, delivering a surprise of -33.33%.

Over the last four quarters, the company has not been able to surpass consensus EPS estimates.

Enerflex, which belongs to the Zacks Oil and Gas - Exploration and Production - Canadian industry, posted revenues of $601 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.54%. This compares to year-ago revenues of $580.11 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Enerflex shares have added about 62.3% since the beginning of the year versus the S&P 500's gain of 25.5%.

What's Next for Enerflex?

While Enerflex has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Enerflex: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.08 on $588 million in revenues for the coming quarter and $0.19 on $2.43 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Exploration and Production - Canadian is currently in the bottom 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the broader Zacks Oils-Energy sector, Canadian Solar (CSIQ), is yet to report results for the quarter ended September 2024. The results are expected to be released on December 5.

This solar wafers manufacturer is expected to post quarterly loss of $0.44 per share in its upcoming report, which represents a year-over-year change of -237.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Canadian Solar's revenues are expected to be $1.69 billion, down 8.6% from the year-ago quarter.

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FTC Solar (FTCI) came out with a quarterly loss of $0.10 per share versus the Zacks Consensus Estimate of a loss of $0.08. This compares to loss of $0.08 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -25%. A quarter ago, it was expected that this solar tracking systems maker would post a loss of $0.09 per share when it actually produced a loss of $0.09, delivering no surprise.

Over the last four quarters, the company has not been able to surpass consensus EPS estimates.

FTC Solar, which belongs to the Zacks Solar industry, posted revenues of $10.14 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.66%. This compares to year-ago revenues of $30.55 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

FTC Solar shares have lost about 24.8% since the beginning of the year versus the S&P 500's gain of 25.8%.

What's Next for FTC Solar?

While FTC Solar has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for FTC Solar: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.06 on $20.89 million in revenues for the coming quarter and -$0.33 on $54.77 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Solar is currently in the bottom 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Canadian Solar (CSIQ), is yet to report results for the quarter ended September 2024. The results are expected to be released on December 5.

This solar wafers manufacturer is expected to post quarterly loss of $0.44 per share in its upcoming report, which represents a year-over-year change of -237.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Canadian Solar's revenues are expected to be $1.69 billion, down 8.6% from the year-ago quarter.

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