The near-term outlook for First Solar isn’t looking too bright, Evercore ISI warned. Analyst Sean Morgan downgraded the solar stock to in line from outperform as he now sees recent tailwinds better reflected in the current price. He raised its price target by $7 to $157, but that new target still implies the stock could drop 6.1% from where it closed Monday. “With the capacity for FSLR largely sold out through 2025-2026, and current manufacturing volume expansion already factored into our model, we are beginning to see the benefits of the IRA and its PTC provisions being largely reflected in the current FSLR share price,” Morgan said in a note to clients Tuesday. The stock dropped 3.4% in premarket trading Tuesday following the downgrade. Morgan said First Solar has been a “major beneficiary” from the Inflation Reduction Act , outperforming the residential solar market since July 2022. But he said the company may not have further room to grow given the fact that it is sold out for the next few years. He also said the stock’s recent outperformance would be hard to replicate. It’s up 11.7% so far this year, continuing its ascent after jumping 71.9% in 2022. FSLR 1Y mountain FSLR in past year More broadly, the solar residential market has lagged in the fourth quarter and into 2023 despite the tailwinds expected from the IRA, he said. While keeping Sunnova Energy and SunPower at outperform, he also cut their price targets, — CNBC’s Michael Bloom contributed to this report.