KeyBanc upgrades Sunrun stock rating to Sector Weight from Underweight

Investing.com - KeyBanc upgraded Sunrun (NASDAQ:RUN), currently trading at $11.11 with a market capitalization of $2.54 billion, from Underweight to Sector Weight on Tuesday.

The upgrade follows a modification to a provision that would have denied Investment Tax Credit ( ITC (NSE:ITC)) benefits to leased equipment. Solar was excluded from this provision at the last moment, preserving one of the most popular residential solar deployment models. According to InvestingPro data, the stock has shown strong momentum with a 22.9% return over the past week.

Sunrun shares reacted positively to the regulatory development, with the stock trading closer to levels seen before the Offshore Balance Billing Ban (OBBB) concerns.

KeyBanc noted that while Sunrun’s vulnerability to regulatory risks has been "laid bare" and should restrict multiple expansion in the medium term, the immediate regulatory threat has dissipated.

The firm also cited ongoing market consolidation following the bankruptcy of another national competitor as a factor that should provide Sunrun with "stable tailwind in the near term."

In other recent news, Sunrun Inc . has been the focus of several significant developments. RBC Capital Markets downgraded Sunrun from Outperform to Sector Perform, citing concerns over proposed changes to residential solar tax credits. This change in the Senate reconciliation bill could impact Sunrun’s business model, which heavily relies on these credits. Despite these concerns, GLJ Research upgraded Sunrun’s stock rating from Sell to Hold, influenced by political support for maintaining energy tax credits, as expressed by several GOP Senators. Citi analysts noted positive momentum for Sunrun following the signing of the reconciliation bill, which has created a more favorable environment for residential solar companies. The bill’s provisions have generated improved sentiment among investors, with Citi expecting this momentum to continue. Additionally, Sunrun announced the re-election of its directors and the approval of executive compensation at its Annual Meeting of Stockholders. The company also secured stockholder approval for its equity incentive plan, reflecting continued support for its governance practices. These recent developments highlight the dynamic landscape Sunrun is navigating amid changing regulatory and political conditions.

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