First Solar shorts hit a fresh high as analysts cut targets after earnings

Short sellers have rebuilt their position in FSLR to the highest level in at least a year, with short interest climbing to 11% of the free float from around 8.4% a week earlier, adding roughly 2.8 million shares to the short book in a matter of days.

The acceleration is the clearest story in the data this week. Short interest sat near 9 million shares through most of October, then jumped sharply to nearly 11.8 million by October 29. That 8.4% weekly increase is the largest single-week move tracked in this series, and the 19% rise over the past month confirms the trend has been building for some time. Despite the surge in borrowed shares, the lending market shows no sign of stress. Availability is running at 625%, meaning more than six shares sit ready to borrow for every one currently lent out. Cost to borrow remains negligible at 0.52% annualised. This is a meaningful change from the picture described in the prior note, where availability had tightened to around 40% and borrowing costs spiked above 8%. The borrow market has since loosened considerably, which means the rise in short interest is driven by fresh demand to short, not a squeeze on existing positions.

The timing is not coincidental. First Solar reported earnings on October 29, and analysts moved quickly on October 30 with a wave of target reductions. The pattern was consistent: firms that had been bullish kept their ratings but cut their numbers. Morgan Stanley held its Overweight rating but trimmed its target from $326 to $307. Wells Fargo maintained Overweight while dropping from $313 to $260. Needham kept its Buy but cut from $303 to $236. The lone outlier was GLJ Research, which downgraded from Buy to Hold with a $161 target, the only firm to change its rating. Guggenheim moved in the opposite direction before the print, raising its Buy target from $282 to $299 on October 27. The mean analyst target now sits at $274, which implies roughly 57% upside from the current price of $174.40. That gap is wide, but it reflects how far the stock has fallen rather than a sudden burst of Street optimism. The earnings yield factor ranks in the 92nd percentile and EV/EBIT in the 96th, pointing to a stock that looks cheap on reported numbers. Against that, EPS momentum ranks in just the 21st percentile over 90 days, and the short score factor sits in the 12th percentile, flagging that the short positioning is extreme relative to peers.

The bear case centres on the fear that the policy-driven advantage First Solar has enjoyed from its domestic, CdTe-based supply chain is temporary. New U.S. and non-China capacity is entering the market, U.S. module inventory is high, and project activity has slowed. Critics argue the business ex-45X tax credits looks more like a high-single-digit-margin manufacturer than the premium asset the bull case assumes. The bull case rests on a roughly 45GW backlog sold through 2029, estimated ex-45X EBITDA margins near 23%, and a path to around $15.5 billion in net cash by 2030. The stock fell about 1.1% on October 30 after reporting, and is up just 1.4% on the week, against a median decline of around 3.6% for its closest peers. ENPH fell 18.8% on the week while CSIQ was roughly flat.

One additional mechanical factor sits in the background. ORTEX puts the probability of First Solar being deleted from the CRSP US Mid and US Large indices at 65% at the December 2026 Quarterly Review, with the rank date on December 4. The price that decides it is $191.15. At the current price of $174.40, the stock is roughly 8.1% below that line. If the deletion is confirmed, index trackers would need to sell an estimated $175 million of FSLR from the Mid index and $53 million from the Large index around December 22. These are forecasts, not announcements, and the December 4 rank date is what matters.

The next earnings event is scheduled for February 23, 2027. Between now and then, the data to watch is whether short interest consolidates near current levels or continues to climb, and whether any analyst revisions shift the consensus target materially from its current $274 mean.