First Solar (FSLR) faces revenue headwinds as management is prepared to idle capacity if reciprocal tariffs are implemented without cost-sharing from customers, Oppenheimer said in a Wednesday report.

The firm said the company might exit planned 2025 contract negotiations due to tariff uncertainty. It now plans to renegotiate contract prices upon clarity around final tariffs and Inflation Reduction Act adjustments, analysts added.

Oppenheimer said it believes First Solar is banking on lawmakers to support its business and that clients will pass incremental costs to "off-takers."

The company trimmed its fiscal 2025 guidance, and the revised outlook excludes 700 megawatts of volume from Vietnam and Malaysia at the high end and 2.5 gigawatts at the low end, along with "0.8 GW of Indian Series 7 production reallocated domestically," totalling $100 million to $375 million in revenue headwinds, according to the note.

The brokerage said it lowered its 2025 EPS guidance for the company to $12.55 on revenue of $4.64 billion from $17.42 per share on revenue of $5.59 billion. Oppenheimer's fiscal 2026 EPS guidance fell to $14.18 on revenue of $5.21 billion from $20.29 per share on revenue of $6.61 billion, considering Malaysia and Vietnam capacity remain idled through the period.

The brokerage said it downgraded the stock to perform and removed its price target of $304 per share.

First Solar shares were down 9% in recent trading.

Price: 124.01, Change: -13.23, Percent Change: -9.64