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On Monday, Goldman Sachs maintained a positive stance on Sunrun (NASDAQ:RUN), with analyst Brian Lee raising the solar company’s price target from $12.00 to $15.00. The firm continues to recommend a Buy rating on the stock. Currently trading at $12.25, InvestingPro analysis suggests the stock is slightly undervalued. The stock has shown strong momentum with a 26.16% return over the past six months. Lee’s valuation is based on a net asset value (NAV) approach, taking into account the assets expected to be installed through 2026.
According to Lee, the increase in the price target to $15 is a result of a combination of factors. The underlying assets are now valued at $12, up from the previous $11, due to slight adjustments in Goldman Sachs’ assumptions. Additionally, the multiple applied to future NAV creation has been increased to 1.5 times from the earlier 1.0 times, reflecting an improved installation outlook influenced by potential tariff and policy relief. This target falls within the broader analyst range of $7 to $20, with three analysts recently revising their earnings estimates upward.
The analyst has also adjusted the value assigned to future NAV creation, which has been increased to $3 from the previous estimate of $1. This revision is a significant factor behind the new price target, signaling Goldman Sachs’ confidence in Sunrun’s growth prospects and the solar industry’s potential benefits from changing tariffs and policies.
However, Goldman Sachs also acknowledges risks that could impact Sunrun’s performance. Key concerns include the possibility of slower megawatt (MW) growth, shifts in policy such as changes to net metering regulations, and the impact of rising interest rates. InvestingPro data highlights additional challenges, including significant debt burden with a debt-to-equity ratio of 5.23 and rapid cash burn. Subscribers to InvestingPro can access 15 more key insights about Sunrun’s financial health and market position.
Sunrun, as a leading player in the residential solar market, is at the forefront of the renewable energy sector. With annual revenue of $2.08 billion and a market capitalization of $2.8 billion, the company’s stock price movement will likely continue to be influenced by its ability to navigate the evolving landscape of energy policies and market conditions. With the revised price target, Goldman Sachs signals its belief that Sunrun is well-positioned to capitalize on the opportunities ahead, despite current profitability challenges reflected in its negative earnings per share of -$12.10.
In other recent news, Sunrun Inc . reported a stronger-than-expected performance for the first quarter of 2025, with earnings per share (EPS) of -$0.20, surpassing the forecast of -$0.37. The company’s revenue also exceeded expectations, reaching $504.3 million compared to the projected $486.1 million. Following these results, UBS raised its price target for Sunrun to $17, maintaining a Buy rating, citing favorable renewable energy tax credit policies. Mizuho (NYSE:MFG) also increased its price target to $16, retaining an Outperform rating, following Sunrun’s first-quarter performance and cash generation target reaffirmation.
Barclays (LON:BARC) maintained its Equalweight rating with a $15 price target, noting Sunrun’s strong demand outlook and cash generation of $56 million for the quarter. JPMorgan reiterated its Overweight rating and $13 price target, discussing the potential positive impact of legislative changes on the company’s long-term financial framework. Sunrun’s management expressed confidence in the company’s market position, highlighting the positive customer response to their new Flex (NASDAQ:FLEX) product, which is designed to meet changing consumer demands.
Analysts from JPMorgan and other firms conveyed optimism about Sunrun’s prospects, especially with anticipated changes in the Investment Tax Credit. These developments are seen as pivotal for Sunrun, given its significant presence in the residential solar systems market. Sunrun’s strategic focus on innovation and cost discipline has allowed it to capture a larger market share, with strong growth reported in subscriber value and storage attachment rates.
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