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Investing.com - GLJ Research has reiterated its Sell rating and $0.01 price target on Sunrun (NASDAQ:RUN), expressing concerns about potential risks related to upcoming Treasury guidance. The stock, currently trading at $9.07, has already fallen over 50% in the past year, according to InvestingPro data.
The research firm highlighted that during Sunrun’s recent earnings call, the company and Wall Street analysts appeared to downplay concerns about the Treasury Executive Order due August 18, particularly regarding potential retroactive policy changes. This comes as InvestingPro data shows the company operating with a significant debt burden of $14.1 billion and rapidly burning through cash.
According to GLJ Research, Sunrun management confidently stated it doesn’t expect any retroactive policy changes, a view that many analysts seemed to accept without further scrutiny.
GLJ Research indicated that the market relief being priced into the stock appears premature, suggesting that both management and sell-side analysts may be overlooking significant risks.
The firm specifically noted that the current market sentiment "ignores three material risks tied to the forthcoming Treasury guidance," though the specific nature of these three risks was not detailed in the analyst’s comments.
In other recent news, Sunrun has reported strong second-quarter results, with installations reaching 227.2 megawatts, surpassing both Wolfe Research’s estimate of 205.3 megawatts and consensus expectations of 203 megawatts. The company also achieved significant battery storage installations at 391.5 megawatt-hours, driven by a 69% attach rate, marking an increase from 66% in the previous quarter. Sunrun’s aggregate subscriber value hit $1,553 million, exceeding Wolfe Research’s estimate of $1,305 million. Despite missing cash generation guidance, Sunrun maintained its full-year cash generation range of $200 million to $500 million. Analysts have responded positively, with Goldman Sachs reiterating a Buy rating and a $15.00 price target, and UBS maintaining the same rating and target due to strong storage growth. Oppenheimer raised its price target to $21.00, citing operational gains and reduced customer acquisition costs. JPMorgan also increased its price target to $20.00, attributing the performance to a record storage attachment rate and reduced operating costs. These developments highlight Sunrun’s strategic pivot towards becoming a "storage first" company.
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