Jefferies Upgrades Sunrun to Hold, Sets Price Target at $11

Sunrun has been upgraded to Hold from Underperform by Jefferies with a price target of $11, up from $5. The upgrade is based on improved fundamentals and a better financial outlook.

Sunrun (NASDAQ: RUN) has received a significant upgrade from Jefferies, moving from Underperform to Hold with a new price target of $11, up from $5. This upgrade is based on improved fundamentals and a better financial outlook for the company. The upgrade comes on the heels of the passage of the One Big Beautiful Bill Act (OBBBA), which has provided clearer visibility and a more favorable policy environment for residential solar firms like Sunrun [1].

The OBBBA has been a game-changer for Sunrun, offering credits on solar leases through 2027 and storage through 2035. This legislation has restored investor confidence and provided a more predictable runway for the company's business model, which relies heavily on third-party ownership (TPO) [2]. Jefferies had previously flagged concerns around policy uncertainty, but now sees this legislation as a turning point that boosts Sunrun's near-term outlook.

Despite the upgrade, the broader residential solar sector remains challenged. Jefferies still expects a potential double-digit market decline by 2026 due to the expiration of consumer credit 25D and ongoing residential weakness. However, Sunrun is viewed as the best-positioned name within the space, with its stronger balance sheet and wider distribution reach [3].

The upgrade reflects a recognition that while the industry faces headwinds, Sunrun is emerging as a relative winner in the reshaped policy environment. The company's pivot to storage and its ability to navigate regulatory changes have positioned it favorably compared to its competitors. However, ongoing risks, such as uncertainties tied to the recent executive order and safe harbor rules, remain [2].

In summary, Sunrun's upgrade to Hold by Jefferies is a testament to the improved financial outlook and policy environment for the company. While the broader solar sector faces challenges, Sunrun's position as a relative winner in the reshaped policy environment is evident. Investors should closely monitor the company's progress and the evolving policy landscape.

References:
[1] https://www.tipranks.com/news/the-fly/jefferies-upgrades-sunrun-to-hold-on-ira-visibility-storage-focus-thefly
[2] https://www.investing.com/news/analyst-ratings/sunrun-stock-rating-upgraded-by-jefferies-as-ira-outcome-favors-tpos-93CH-4127846
[3] https://site.financialmodelingprep.com/market-news/fmp-jefferies-upgrades-sunrun-to-hold-stock-rise-2