Shares of First Solar (FSLR) were up 1.67% to $31.11 in Monday morning trading as the solar company's rally picked up where it left off Friday.
Despite the Tempe, Ariz. company's gains, Barclays thinks that the upper bound for its trading price is getting lower. The bank cut its price target on the stock to $40 from $50 in a note circulated to investors Monday.
Oversupply concerns have sent First Solar and its competitors tumbling down this year. The company's stock is down 57.5% from its March peak.
In response, First Solar has accelerated the production timeline for its Series 6 panels and tossed aside plans for the Series 5, which would have been an array of smaller Series 4 panels. It aims to achieve roughly three gigawatts of production from the Series 6 panels by 2019. First Solar is also expected to lay off about 1,600 employees as it tries to cut costs.
Much of the industry's bad news is reflected in share prices across the industry, Barclays argued, but the downturn could last longer than expected.
"It is still early in the likely 'U'-shaped recovery in U.S. utility scale solar demand," analyst Jon Windham wrote. "And we remain cautious due to continued uncertainty in U.S. policy following the election."
First Solar, for its part, has braced for the downturn and said it expects to see earnings of breakeven to 50 cents per share on $2.5 to $2.6 billion in net sales in the 2017 fiscal year, according to its estimates.