Solar energy systems company Sunrun (NASDAQ:RUN) shot up 10.6% in yesterday's trading, amid around three times normal trading volume. The company held onto those gains going into today's trading session and even added some momentum. The company's gains came on the strength of some new considerations from analysts. Though the consideration wasn't all positive, it was sufficiently positive to catch investors' attention. Given that the company already has a strongly bullish consensus rating from the larger financial analyst pool, however, the new positive coverage provides a little extra justification to buy-in.
Sunrun Slips at One Analyst, Gains at Another
The most recent news for Sunrun features two separate, but divergent, analyst's perspectives. The first news came out of Zacks, which lowered the company from “hold” to “sell”. This news comes close to a separate announcement from Zacks, which looked for Sunrun to release negative earnings for the latest fiscal quarter. More specifically, Zacks looks for an earnings loss of $0.02, as based on a consensus estimate that featured an earnings gain of $0.35 and an earnings loss of $0.32. Given that Sunrun issued an earnings loss of $0.11 per share in the same quarter last year, however, this may not be such a problem to investors.
Indeed, it wasn't to Morgan Stanley, who was responsible for the second piece of news. Morgan Stanley just yesterday reiterated an “overweight” rating on the company, and also raised its price target on the company from $86 to $91. Issued by analyst Stephen Byrd, the analysis notes that Sunrun is “the most compelling clean energy stock” that Morgan Stanley is currently covering.
There were several reasons accompanying this projection, including the growth opportunity that Sunrun currently faces amid an increasingly unreliable power grid and customers that continue to demand reliable sources of power. Further, the pressure on grids as recently seen in Texas—and for some time now in California—improves the likelihood that customers will make the move to buy a Sunrun system. Also, Sunrun's low financing costs may remove a key customer objection and add ground that way. Some have even suggested that Sunrun could ultimately prove a player of note in the electric vehicle market, though others are more skeptical, noting that electric vehicle chargers are already something of a commodity for electric vehicle buyers.
What Are Other Financial Analysts Saying About Sunrun Stock?
While Morgan Stanley's thoroughly bullish sentiment on Sunrun stock is welcome, the rest of the pool will provide even more incentive to buy in. Based on our latest research, financial analysts have a consensus rating of “buy” on Sunrun, and have held that stance for over two years now. The Sunrun stock forecast looks decidedly clear.
Sentiment has only been improving for Sunrun; a year ago, the company had seven “buy” ratings and one “hold” to its credit. Six months ago, that shifted to 12 “buy” and two “hold”. Today, we stand at 19 “buy” and two “hold”, which shows that the bullish sentiment for Sunrun has been on an upward trajectory for at least a year.
The Sunrun price target, meanwhile, has proven equally noteworthy. The company currently has a consensus price target of $80.38, with a high of $116 and a low of $55. Given that the Sunrun stock price closed yesterday at $47.73 per share, that represents quite a bit of upside potential, as even the low price target represents a substantial increase.
Recent activity for Sunrun has been somewhat mixed. June has been very kind to Sunrun so far, featuring that increased price target from Morgan Stanley as well as initiated coverage from Guggenheim. Guggenheim declared Sunrun a “buy”, though offered no price target. May was much more mixed, as both KeyCorp and Truist Securities lowered their price targets, but Credit Suisse increased its target. KeyCorp dropped from $74 to $70, and Truist slipped from $85 to $81, but Credit Suisse nudged upward to $82 from the previous $81.
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