BofA’s Hartnett says concentrated U.S. stock returns are likely to persist
Investing.com - Mizuho (NYSE:MFG) raised its price target on Sunrun (NASDAQ:RUN) to $25.00 from $21.00 on Thursday, while maintaining an Outperform rating following the company’s strong second-quarter performance. The new target represents significant upside potential for the stock, which has declined over 50% in the past year and currently trades near $9.07.
The solar company beat consensus estimates on both solar and storage additions in Q2, while increasing its contracted net value creation margin by 12 percentage points sequentially and 17 percentage points year-over-year.
Sunrun’s results were driven by better targeting of high-margin customers, with contracted value increasing 19% year-over-year, alongside 4% lower creation costs due to strong execution.
Upfront proceeds grew to approximately $5,700 per customer in the quarter, exceeding the previous record of $3,400 set in Q4, attributed to higher value creation and advance rate.
Mizuho expects Sunrun to consolidate market share as the third-party ownership model benefits from investment tax credit availability, which the firm believes will continue to drive cash returns.
In other recent news, Sunrun’s second-quarter earnings report has sparked varied reactions among analysts. The company reported stronger-than-expected growth in its solar and storage segments, with a cash generation of $27 million, marking its fifth consecutive quarter of positive cash flow. Despite this, the company’s cash generation missed the guidance, leading to a maintained full-year cash generation range of $200 million to $500 million. BMO Capital raised its price target for Sunrun to $10 from $8, maintaining an Underperform rating, while Oppenheimer increased its target to $21 from $20, citing operational gains. Goldman Sachs and UBS both reiterated their Buy ratings with a $15 price target, highlighting strong storage growth and volume expansion. However, GLJ Research maintained a Sell rating with a $0.01 price target, expressing concerns about potential risks related to upcoming Treasury guidance. These developments reflect a mixed outlook for Sunrun, as analysts weigh the company’s operational performance against external risks.
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