Baird downgraded First Solar to Neutral from Outperform after the company's fourth quarter results fell short of expectations. The brokerage cited a disappointing 2026 revenue outlook of $4.9 billion to $5.2 billion, well below the $6.1 billion consensus estimate, along with rising uncertainty around policy and bookings.

Fourth quarter revenue of $1.68 billion beat Baird's estimate but earnings of $4.84 per share came in below the $5.15 consensus. While gross margin improved to 39.5%, the brokerage expressed concern about near-term margin pressure as international facilities operate at lower utilization until a new finishing line in South Carolina comes online in late 2026.

Baird noted that First Solar's strong backlog is offset by management's cautious approach to new bookings amid open questions around Section 232 tariffs, foreign entity of concern rules, and global trade policy. The absence of GAAP earnings guidance, citing uncertainty around Section 45X credit discounts and tax accounting, could further weigh on investor sentiment as the company navigates policy crosscurrents and product warranty issues.