First Solar Prepares for Q1 Print: Tax Credits Loom Large Amid Tariff and Utilization Overhang

What happened

First Solar is set to report Q1 2026 earnings, with Section 45X manufacturing credits and expanding U.S. capacity expected to support gross margins. However, lingering tariffs and weak utilization at Southeast Asian Series 6 facilities may temper results, echoing the debooking and margin pressures flagged in the FY2025 10-K. The DeepValue report maintains a WAIT rating at ~$243, noting that ~85% of guided gross margin comes from 45X credits, leaving little room for surprises. The key variables to watch are net bookings trajectory after FY2025's 0.9 GW net debookings and the haircut on credit monetization. Any sign of further backlog fragility or widening credit discounts would reinforce the bear case, while stable bookings and credit sales could support the bull scenario.

Implication

Q1 print will test whether the policy-driven earnings engine remains intact. If net bookings stay positive and credit haircuts hold near 5%, the stock could re-rate toward $250+. But if another large breach or widening discount emerges, $170 support becomes plausible.

Thesis delta

No material shift from the WAIT stance. The news reiterates existing puts and calls: tax credits support margins but tariffs and utilization are headwinds. The thesis remains that clarity on bookings and credit sales over the next 6–9 months is needed before underwriting the full value.