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On Tuesday, Jefferies analyst Julian Dumoulin-Smith adjusted the price target on Sunrun shares, traded on (NASDAQ:RUN), to $17.00, a decrease from the previous target of $19.00. The stock currently trades at $10.19, having gained over 10% in the past week despite a challenging six-month period that saw a 43% decline. Despite this change, the firm continues to recommend a Buy rating for the solar company's stock. According to InvestingPro analysis, the stock is currently trading near its Fair Value.
Dumoulin-Smith anticipates a robust quarter for Sunrun, with effective execution on cash generation targets. This expectation is based on the assumption that the company will benefit from the inflow of proceeds from bonus credits. The analyst's outlook remains positive, expecting Sunrun to meet its 2025 cash flow objectives despite recent softness in the residential solar market and growing uncertainties. InvestingPro data reveals significant challenges, including rapid cash burn and a substantial debt burden, with a debt-to-equity ratio of 2.4.
Sunrun's performance is being closely monitored, particularly for any commentary regarding its outlook beyond 2025. This scrutiny comes in light of recent amendments to domestic content guidelines and the transition to the new 48E tax credit structure. Despite these changes, Dumoulin-Smith suggests that Sunrun appears to be in a better position to mitigate near-term risks compared to its peers in the solar industry.
The maintained Buy rating reflects Jefferies' confidence in Sunrun's ability to navigate the evolving landscape of the solar sector and to achieve its financial goals. The revised price target aligns with the firm's analysis of the potential challenges and opportunities that Sunrun may face in the foreseeable future.
In other recent news, Sunrun, a significant player in the residential solar market, has been the recipient of several analyst adjustments. UBS analyst Jon Windham upgraded Sunrun from Neutral to Buy, citing the company's growth in market share and increased deployment of battery storage. However, Clear Street reduced its price target for Sunrun, reflecting a cautious outlook amid external uncertainties.
Sunrun's market share in California has nearly doubled, and the company has been successful in attaching battery storage to about 60% of its new projects. The deployment of storage solutions has surged by 126% year-over-year, expanding the company's addressable market. Windham anticipates a 15% growth in the U.S. residential solar market in 2025 and suggests that adjustments to renewable tax credits could positively impact sector valuations.
Sunrun recently announced a reshuffling of its board of directors, with Gerald Risk departing and John Trinta appointed as the new Audit Committee Chair. The company also reported strong third-quarter results, achieving a milestone of 1 million customers and a record number of storage installations. Its annual recurring revenue surpassed $1.5 billion, a 22% increase from the previous year, and installed 336 megawatt-hours of storage, a 92% increase over the prior year.
Sunrun projects a cash generation of $50 to $125 million in the next quarter and $350 to $600 million in 2025. The company also anticipates installing 320 to 350 megawatt-hours of storage and 240 to 250 megawatts of solar capacity. These recent developments highlight Sunrun's continued focus on growth and profitability despite the current policy environment.
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