First Solar (FSLR) may benefit from a "favorable" US utility-scale solar tax policy, as only "relatively minor changes" were proposed in the Republican budget, UBS said in a Wednesday note.

The budget proposed "only" a one-year pull forward of the Advanced Manufacturing Production (45X) tax credit phase-out and the elimination of tax credit transferability, analysts led by Jon Windham wrote.

The report also noted that if the proposal is passed, First Solar will have roughly $13.5 billion of net cash by 2029 end as "market pivots to contemplating accretive capital redeployment avenues," while capital re-infusion would enhance earnings.

The company's "dominance in manufacturing fully domestic U.S. solar modules uniquely aligns FSLR with the Trump administration's broader energy policy goals, independent of emission reduction goals," UBS said.

UBS raised First Solar's price target to $255 from $235 and maintained a buy rating on the stock.

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