First Solar (NASDAQ: FSLR) rose Tuesday following news that it will replace Fortune Brands Home & Security (NYSE:FBHS) in the S&P 500. Fortune Brands is spinning off a division and will then replace First Solar in the S&P MidCap 400.
The transaction is expected to be completed December 15. Post spinoff, Fortune Brands Home & Security will have a name and symbol change to Fortune Brands Innovations Inc. (NYSE:FBIN) and will be more representative of the midcap market space. Conn's is no longer representative of the small-cap market space.
In late November, a JPMorgan analyst downgraded shares of First Solar to “neutral” from “overweight.” In particular, the analyst cited practical concerns about the company already scooping up the low-hanging fruit of recent catalysts.
Following the passage of the U.S. Inflation Reduction Act, JPMorgan assigned an “overweight” rating to FSLR stock. That represented an upgrade from its prior assessment. Per a White House statement, the act provides expanded clean energy tax credits for various industry subsegments, including solar.
Additionally, as part of its “Revitalize American Manufacturing” component, the act incentivizes domestic production of clean energy technologies. The act also aims to support U.S. workers through “targeted tax incentives aimed at manufacturing U.S. sourced products such as batteries, solar, and offshore wind components, and technologies for carbon capture systems.”
FSLR shares gathered $1.40 to $151.68, while those for FBHS moved up $2.58, or 4.2%, to $64.49.
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