Sunrun stock price target raised to $15 by UBS on leasing advantage

Investing.com - UBS has reiterated a Buy rating and raised its price target to $15.00 from an unspecified previous target on Sunrun (NASDAQ:RUN), currently trading at $10.59 with a market capitalization of $2.4 billion. The company, which has seen a strong 17.5% return year-to-date according to InvestingPro, maintains a dominant position in the residential solar leasing market.

The price target adjustment follows President Trump’s signing of the budget bill on July 4, 2025, which contains provisions affecting the solar industry. According to UBS, the legislation includes two conflicting elements for residential solar tax credits. InvestingPro data reveals that Sunrun operates with significant debt levels, with a debt-to-equity ratio of 5.23x, making policy changes particularly important for its financial outlook.

The bill terminates the homeowner residential solar tax credit (25D) at the end of 2025. However, residential solar leasing will remain eligible for the Investment Tax Credit ( ITC (NSE:ITC)) under section 48E as a commercial project.

UBS believes this policy backdrop positions Sunrun favorably for increased deployments from 2026 onwards. The firm specifically points to Sunrun’s dominant share in the residential leasing market as a key advantage.

The analysis suggests that while direct homeowner solar purchases will lose tax incentives, Sunrun’s leasing-focused business model will continue to benefit from commercial tax credits, potentially driving growth after 2025.

In other recent news, Sunrun’s financial landscape has seen significant developments. Jefferies upgraded Sunrun’s stock rating from Underperform to Hold, raising the price target to $11.00, following the signing of the One Big Beautiful Bill Act, which offers credits on solar leases through 2027. This act is seen as a positive for Sunrun’s business model, which relies heavily on lease and power purchase agreements. KeyBanc also upgraded Sunrun from Underweight to Sector Weight due to a regulatory change that preserved Investment Tax Credit benefits for solar leasing. However, RBC Capital Markets downgraded Sunrun from Outperform to Sector Perform, citing concerns about proposed changes to residential solar tax credits that could impact Sunrun’s business model. Despite these mixed analyst opinions, Citi analysts noted positive momentum for Sunrun following the reconciliation bill, which created a more favorable environment for residential solar companies. Recent legislative actions have preserved tax credits for solar leasing arrangements, which has been beneficial for Sunrun and other solar stocks. Overall, these developments highlight the dynamic regulatory environment impacting Sunrun’s operations.

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