Investing.com -- Baird upgraded First Solar to Outperform from Neutral in a note Tuesday, telling investors a tariff decision removes a key overhang and clears the way for new bookings to resume.

Analyst Ben Kallo raised the firm's price target to $318 from $205, noting that the firm had spent nearly six months on the sidelines.

The analyst pointed to benefits from a strong utility-scale market, more appropriately calibrated estimates, and potential for the company to articulate its capital allocation priorities.

However, Kallo said that central to the call is that the Section 232 tariff outcome "removes an overhang for bookings to resume (and at higher ASPs)."

Baird described the tariff decision as "a clearing event for FSLR," a long-awaited catalyst for the company and its customers "to resume booking new business."

The firm believes the executive order adds clarity to the price at which new modules should be booked and removes an overhang on the stock, which it expects to catalyze bookings for 2029-2030.

Kallo stated that a "complicated story is becoming more straightforward," with policy unknowns such as Section 232 now in the rearview, making it easier to own the shares.

He also expects utility-scale solar strength to continue into the next decade, benefiting First Solar as "the largest pure-play market cap solar manufacturer."

The firm sees the ability to contract capacity at higher average selling prices as the next catalyst, and said capital deployment will be a focus as First Solar exits its capex-heavy investment cycle. Baird extended its estimates through 2030 to better reflect the company's earnings power.