’Reddit is built for this moment’ - Stock soars on crushed earnings
On Thursday, Barclays (LON:BARC) analyst Christine Cho reaffirmed Sunrun Inc .’s (NASDAQ:RUN) Equalweight rating and maintained a price target of $15.00. The stock, currently trading at $6.53, has seen a significant decline of over 55% in the past six months, though InvestingPro data shows it’s currently trading below its Fair Value. Cho’s statement highlighted the company’s expected cash generation, indicating that despite external pressures such as political issues and tariffs, Sunrun is anticipated to reiterate its 2025 cash generation guidance of $200 million to $500 million. This forecast aligns with Barclays’ own estimate of approximately $360 million. However, InvestingPro analysis reveals the company is currently burning through cash rapidly, with negative free cash flow and a concerning debt-to-equity ratio of 5.13x. Subscribers to InvestingPro can access 12 additional key insights about Sunrun’s financial health and prospects.
Cho noted that Sunrun seems to be shielded in the short term from potential price increases in equipment that could stem from tariffs. The expectation is that Sunrun will continue to reduce its recourse debt by about $100 million. This debt repayment is seen as a step towards achieving a leverage ratio of recourse debt to cash generation between 1.5x and 3x, a range that the management is comfortable with.
The analysis by Barclays also took into account that the cash generation guidance does not include any significant safe harboring activities that might occur if there is a step-down of the Investment Tax Credit ( ITC (NSE:ITC)) on January 1, 2026. Cho pointed out that the company’s financial strategies and projections do not rely on these potential tax benefits.
Looking forward, Cho mentioned that budget reconciliation discussions are expected to occur in May or June. These discussions will likely provide further insights into negotiations regarding possible rollbacks of the Inflation Reduction Act (IRA). The outcome of these talks could have implications for Sunrun’s financial strategies and industry regulations moving forward. With Sunrun’s overall financial health score rated as "WEAK" by InvestingPro, investors can access comprehensive analysis and the detailed Pro Research Report covering all crucial aspects of the company’s performance and outlook.
In other recent news, Sunrun has been navigating a challenging period in the solar industry, marked by several analyst assessments and corporate developments. Deutsche Bank (ETR:DBKGn) has maintained its Buy rating on Sunrun, setting a price target of $10.50, citing the company’s effective management of industry challenges and positive cash generation in consecutive quarters. Meanwhile, Jefferies downgraded Sunrun from Buy to Hold, reducing the price target to $8, reflecting concerns over market uncertainties and the impact of the Inflation Reduction Act (IRA). Truist Securities also lowered its price target for Sunrun to $6, maintaining a Hold rating due to ongoing sector difficulties.
Jefferies further reduced its price target to $7, emphasizing the lack of clear long-term growth visibility and potential declines in installations. Alongside these financial evaluations, Sunrun experienced a change in its board of directors with the resignation of Manjula Talreja, leading to a reduction in board size from nine to eight members. The company continues to adapt its strategic approach, including extending debt maturities and expanding its dealer network. These recent developments highlight the ongoing challenges and strategic adjustments faced by Sunrun as it maneuvers through a turbulent market environment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.