Jefferies downgraded First Solar (NASDAQ: FSLR) to Hold from Buy and reduced its price target to $260.00 from $269.00, sending shares down more than 4% in pre-market trading on Wednesday.

The firm said it was cautious on First Solar's 2026 outlook due to limited booking visibility and emerging strategic questions. Jefferies said expectations around Section 232 tailwinds could disappoint investors, citing potential carve-outs for Germany and other regions that could dilute pricing benefits, as well as developers accelerating projects ahead of duties and FEOC considerations.

International manufacturing facilities were described as a continued challenge while tariffs remain in place. Although First Solar was expected to remain free-cash-flow positive, Jefferies said the timeline for meaningful cash generation was likely too extended to serve as a near-term catalyst for the stock, leading the firm to see limited upside from current levels.