Sunrun Upgraded to Buy with $21 PT by Jefferies on Strong 2025 and 2026 Outlooks.

Sunrun rallies 6.7% to a 52-week high after Jefferies upgrades to Buy from Hold and raises the price target to $21 from $11, citing a strong finish to 2025 and even better prospects for 2026. The residential solar solutions provider has seen increased demand and is well-positioned to capitalize on the growing market.

Sunrun Inc. (NASDAQ: RUN) saw its shares surge 6.7% to a 52-week high on Wednesday, driven by a positive upgrade from Jefferies analysts. The upgrade changed the rating from Hold to Buy, with a new price target of $21, up from $11. The upgrade was based on anticipated strong cash generation in the second half of 2025 and promising growth prospects for 2026, even after the expiration of the 25D consumer tax credits Sunrun rallies as Jefferies upgrades, seeing strong 2025 finish and even better 2026^[1].

Jefferies analyst Julien Dumoulin-Smith highlighted Sunrun's ability to capitalize on the transition from cash/loan sales to power purchase agreements (PPAs) and lease contracts, which aligns with Sunrun's core expertise. The analyst raised his estimate for Sunrun's FY 2026 solar installs by 6% in megawatts, implying a subscriber growth rate of around 11% year-over-year. Dumoulin-Smith also noted that market consultants are expecting third-party ownership (TPO) to grow by approximately 25% year-over-year in 2026, suggesting that Sunrun's growth potential might be underestimated Sunrun rallies as Jefferies upgrades, seeing strong 2025 finish and even better 2026^[1].

While Sunrun has delivered $82 million in earnings year-to-date, compared to the midpoint of guidance at $350 million, the analyst attributed the underperformance to unexpected safe harbor spending. However, the company's management has indicated that it is tracking toward the guidance midpoint even after adjusting for safe harbor spending in Q3 Sunrun rallies as Jefferies upgrades, seeing strong 2025 finish and even better 2026^[1].

The upgrade comes as the residential solar market is set to experience a significant decline due to the expiration of the 25D tax credits, which is expected to reduce the install market from around 4.5 gigawatts (GW) in 2025 to 3.5-4.0 GWs in 2026. Despite this, Sunrun is well-positioned to grow through its focus on PPAs and lease contracts, which are expected to become increasingly important in the market Sunrun rallies as Jefferies upgrades, seeing strong 2025 finish and even better 2026^[1].

Sunrun's rally indicates investor confidence in the company's ability to navigate the post-25D tax credit landscape and capitalize on the growing demand for residential solar solutions. The upgrade from Jefferies also suggests that the market may be underestimating Sunrun's growth potential in the coming years.