First Solar faces class action over tariff risk, stock loses $60 per share

First Solar faces a securities class action alleging it misled investors about tariff exposure, with the stock declining more than $60 per share across multiple corrective drops.

"Defendants had overstated First Solar's capacity to manage the impact of US tariff policy on the company's business," the complaint filed by The Gross Law Firm alleges.

The class period covers Feb. 26, 2025 through Feb. 24, 2026. The lawsuit claims management knew that intentional underutilization of production facilities in Malaysia and Vietnam, along with the attempted relocation of production to the US, would hurt 2026 results — even as SEC filings warned only generically about tariff risks. Shareholders have until Aug. 24, 2026 to seek lead plaintiff status.

The litigation adds legal risk to a stock already navigating trade policy uncertainty. First Solar's fair value estimate stands at US$251.90, according to Simply Wall St, while published analyst targets range from US$217 to US$330. The company maintains 2026 guidance for 17.0 GW to 18.2 GW of volume sold and US$4.9 billion to US$5.2 billion in net sales.

The lawsuit is one of multiple securities class actions filed against First Solar and certain officers. A separate action led by Pomerantz LLP in the Eastern District of New York makes similar allegations, focusing on claims that First Solar overstated its ability to manage US tariff impacts.

The allegations come as the US Department of Commerce investigates whether solar cells produced in Ethiopia are circumventing antidumping and countervailing duty orders on Chinese products — a probe First Solar itself helped initiate alongside Hanwha Qcells, Suniva, Swift Solar and Silfab Solar.

Analysts project a 10.4% decline in First Solar's earnings per share for fiscal Q2 2026 to US$2.85. Despite the legal headwinds, several firms including Barclays, Morgan Stanley, Wells Fargo, UBS and Deutsche Bank have raised price targets, citing potential Section 232 tariff outcomes, higher assumed US module pricing and a solid balance sheet. Wells Fargo raised its target to US$320, assuming a long-term US realized average selling price of US$0.42 per watt.

The class action introduces a new overhang for First Solar shares, which must now contend with both litigation discovery and the outcome of the Section 232 tariff ruling expected by early August. Investors will watch the Aug. 24 lead plaintiff deadline for signals on how aggressively shareholders intend to pursue the claims.

This article is for informational purposes only and does not constitute investment advice.