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Investing.com - BMO Capital upgraded Sunrun (NASDAQ:RUN) from Underperform to Market Perform on Wednesday, while raising its price target to $19.00 from $10.00. The stock, currently trading at $20.68, has shown remarkable momentum with a 208% surge over the past six months, according to InvestingPro data.
The upgrade reflects BMO’s revised outlook on Sunrun’s cash generation capabilities and potential for capital returns to shareholders, rather than concerns about investment tax credits or residential solar growth in the current interest rate environment. InvestingPro analysis indicates the company operates with significant debt burden, with a debt-to-equity ratio of 4.84.
BMO Capital noted that Sunrun appears to be in a better position than previously expected to commence either share repurchases or offer dividends in the second half of 2026.
The firm had previously maintained a negative view on Sunrun, primarily due to skepticism about whether the company’s cash generation performance metrics would resonate with investors and lead to capital returns.
The new Market Perform rating suggests BMO now sees Sunrun’s business fundamentals and financial outlook as being more aligned with the current market valuation of the residential solar provider.
In other recent news, Sunrun has been the focus of analyst discussions, with Goldman Sachs reiterating its Buy rating and maintaining a price target of $19. This follows Sunrun’s recent securitization activities, where the company priced a $510 million securitization of leases and power purchase agreements. Barclays also maintained its Equalweight rating on Sunrun, setting a price target of $15, and highlighted the company’s strategic momentum and strong foundation for navigating market transitions. Meanwhile, the broader U.S. solar sector has seen positive developments, with China’s efforts to combat deflation leading to a gradual price recovery, which has lifted U.S. solar stocks. Despite these advancements, Daiwa has maintained a negative outlook on the China solar sector, citing steady photovoltaic glass prices and operational capacity. Additionally, President Donald Trump reiterated his criticism of renewable energy sources, particularly solar and wind, focusing on their economic impact. These recent developments provide a varied landscape for investors considering the solar industry.
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