Sunrun extends 2-day surge to 22% on Morgan Stanley upgrade that calls for the stock to climb another 73% from current level
Mike Blake/Reuters
- Residential solar provider Sunrun continued its upswing for a second day, extending gains from Tuesday's close to 22%.
- Morgan Stanley upgraded its target price for Sunrun to $91 from $86, implying a 73% increase from Thursday's intraday high.
- A deal between Sunrun and Ford, announced last month, is another green light for the solar company.
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Residential solar provider Sunrun continued its upswing for a second day on a sunny rating upgrade from Morgan Stanley, climbing as much as 22% from Tuesday's close.
The bank upgraded its target price for Sunrun to $91 from $86 previously, implying a 73% increase from Thursday's intraday high.
The increased price target was based in part on what Morgan Stanley believes is an unjustifiably low share price, noting that current valuations suggest the company will go out of business in six years. Another bullish indicator for Sunrun is burgeoning electric vehicle adoption, which the bank thinks will nudge more eco-conscious consumers into buying rooftop solar panels.
"Sunrun remains our top pick in clean tech," wrote Morgan Stanley's equity analysts in a note.
The bank said the company is set to be the beneficiary of several "megatrends" including falling clean energy costs, consumer demand for clean energy, and growing power-grid needs due to climate change.
A deal between Sunrun and Ford, announced last month, is another green light for the solar company. Under the deal, Sunrun will act as the "preferred installer" for the home charging stations that accompany Ford's upcoming electric truck, the F-150 Lightning. When Sunrun installs the truck charging stations, it will also offer customers the "opportunity" to buy a home solar system.
"Even at relatively low adoption rates, this EV opportunity could be quite meaningful compared to the overall current size of Sunrun's new customer value creation," the analysts wrote.