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Investing.com - Wells Fargo raised its price target on Sunrun (NASDAQ:RUN) to $14.00 from $8.00 on Thursday, while maintaining an Overweight rating on the residential solar company’s stock. The company, currently trading at $10.93 with a market capitalization of $2.52 billion, has seen its stock price decline 41% over the past year.
The investment bank’s new valuation framework for Sunrun consists of two components: an $8 per share base value reflecting cash generation through 2025-2030, and a $6 per share terminal value for 2030 and beyond. According to InvestingPro data, the company operates with a significant debt burden, with a debt-to-equity ratio of 4.84.
Wells Fargo noted that Sunrun’s cash generation outlook remains strong following the Ownership, Build Back Better Act (OBBBA), which provides tax incentives for renewable energy investments. However, InvestingPro analysis indicates the company is quickly burning through cash, with negative free cash flow in recent quarters.
The firm continues to view Sunrun as a top pick in the residential solar space, indicating confidence in the company’s business model and growth trajectory.
Wells Fargo also suggested that investors are currently underappreciating Sunrun’s longer-term upside potential beyond 2030, which forms a significant portion of its revised valuation model.
In other recent news, Sunrun reported its second-quarter 2025 earnings with a revenue of $569.3 million, marking an 8.7% growth year-over-year and surpassing the consensus estimate of $559 million. Following these results, several analyst firms adjusted their price targets for Sunrun. Mizuho raised its target to $25, maintaining an Outperform rating, citing strong performance and increased net value creation margins. Freedom Broker increased its target to $14.50, keeping a Hold rating, while BMO Capital adjusted its target to $10, maintaining an Underperform rating due to missed cash generation expectations. UBS raised its price target to $16, maintaining a Buy rating, and revised its solar capacity deployment forecasts upward for the coming years. On the other hand, GLJ Research reiterated a Sell rating with a $0.01 price target, expressing concerns about potential risks from upcoming Treasury guidance. These developments reflect varied analyst perspectives on Sunrun’s future performance.
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