Sophie Karp names her top stock for renewables exposure

First Solar Inc (NASDAQ: FSLR) has already more than doubled over the past six months but a KeyBanc expert recommends sticking to it as it still has more upside that’s yet to unlock.

First Solar stock to benefit from the IRA

Sophie Karp is convinced that this American manufacturer of solar panels will be a key beneficiary of the “Inflation Reduction Act”. On CNBC’s “Fast Money”, she said:

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First Solar is the best way to get exposure to renewables. It’s definitely ahead of competition on domestic capacity additions that would benefit from the IRA. I believe they’ll announce additional expansion in the near term.

The federal law promises more than $300 billion investment into clean energy, which is why Karp is constructive on solar equipment makers at large.

Karp recommends buying First Solar stock and sees upside in it to $175 – up another 20% from here.

First Solar stock is still inexpensive to own

Karp also likes First Solar stock for its strong balance sheet. It’s the 8^th best performing name in the S&P 500 this year and yet, she does not find it expensive to own.

Despite being up 80% year-to-date, it still seems attractive on valuation. It’s trading at 15 times price to earnings multiple on 2024 numbers. They’re one of the best positioned names to harvest all the tax benefits from the IRA.

Last month, the Nasdaq-listed firm agreed to supplying an additional 4,900 megawatt of its thin film photovoltaic modules to Intersect Power.

It is noteworthy, though, that First Solar Inc was shy of Street estimates in its latest reported quarter.