What Happened?
Shares of solar panel manufacturer First Solar (NASDAQ:FSLR) fell 6.6% in the afternoon session after solar stocks fell after President Donald Trump announced plans to end certain renewable energy incentives. President Trump added "Today, we will end the Green New Deal, and we will revoke the electric vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American auto workers.".
The shares closed the day at $183.52, down 4.9% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy First Solar? Access our full analysis report here, it’s free.
What The Market Is Telling Us
First Solar’s shares are very volatile and have had 24 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 16.1% after renewable energy stocks declined as Republican party candidate Donald Trump was declared the winner of the 2024 US presidential election. For clean or renewable energy stocks, President-elect Trump is considered a headwind to their businesses. Specifically, his administration could lead to an overhaul of recent industry progress, including a repeal of President Biden’s Inflation Reduction Act. The IRA, as it's known, offers long-term tax credits for solar, wind, geothermal, and other renewable energy projects, often extending them for a decade. These tax credits offer stability and predictability, enabling companies to make long-term investment plans. For example, solar and wind energy developers benefit from a 30% investment tax credit (ITC), which can increase further if certain labor and domestic content standards are met.
First Solar is down 1.3% since the beginning of the year, and at $184.10 per share, it is trading 38.8% below its 52-week high of $300.71 from June 2024. Investors who bought $1,000 worth of First Solar’s shares 5 years ago would now be looking at an investment worth $3,571.
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