First Solar (FSLR) faces continued headwinds from tariffs, which are disrupting the company's operations, RBC Capital Markets said in a note Wednesday.
"While there are options on the table to minimize the longer-term impacts, the company is in a holding pattern until it gets additional clarity on the [Inflation Reduction Act] and final tariff rates," the firm said.
RBC noted that First Solar is a "significant beneficiary" of the IRA and its valuation assumes that IRA credits are certain through 2032.
On the tariffs, the firm said the current 10% universal rates are "manageable."
"But if reciprocal rates are reimposed the impact could be significant and include idling production in Vietnam and Malaysia," the firm said.
RBC said tariffs are causing uncertainty and weighing on the company's Malaysia/Vietnam import strategy in the near term.
RBC cut the company's price target to $214 from $237 and maintained its outperform rating.
Shares of First Solar fell over 9% in recent Wednesday trading.
Price: 124.24, Change: -13.00, Percent Change: -9.47
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