First Solar slides after Bank of America downgrades stock to underperform
Shares of First Solar declined 5% during premarket trading Tuesday after Bank of America downgraded the stock to underperform from neutral, saying the company has been given "too much credit for a reality that has never materialized." The Commerce Department recently announced plans to investigate a claim that Chinese companies are avoiding tariffs by moving operations, which could be a boon for domestic panel manufacturer First Solar. But Bank of America said that policy tailwinds have, in the past, failed to drive pricing power for the company. Additionally, analysts led by Julien Dumoulin-Smith said the stock now trades at a premium relative to where it traded prior to the company's fourth-quarter earnings results. That report on March 1 sent shares tumbling after First Solar missed revenue estimates and gave disappointing guidance. The company has faced a number of headwinds, including rising raw material costs, supply chain bottlenecks, and elevated freight rates. "At the end of the day, expansion is not backed by fundamentals, leaving shares susceptible to significant derating in our view," the firm said. Bank of America also cut its price target on the stock from $76.50 to $65.50. The new target is 22% below where the stock closed on Monday. "We see 2022 facing limited upside catalysts vs numbers as previously guided," the firm said. Shares of First Solar are down about 4% for the year. - CNBC's Michael Bloom contributed reporting.

Brett Catchings scans a series 6 solar panel at the end of the manufacturing line during a tour of a First Solar plant in Walbridge, Ohio, October 6, 2021. Dane Rhys | Reuters