While shares of Sunrun (RUN 1.02%) heated up in September and soared 36%, the stock took a downturn and plunged 33% last month, according to data from S&P Global Market Intelligence. Besides some uninspiring takes on the stock from Wall Street, investors also lost enthusiasm for the stock following an announcement related to tariffs and the solar industry from the White House.
Although Sunrun completed the acquisition of Vivint Solar on Oct. 8, investors' enthusiasm didn't last long as days later, the White House revealed its intent to impose tariffs on imported solar panels and modules from 15% to 18%. In addition, President Trump announced his intent to eliminate the exemption for bifacial solar panels.
Investors weren't the only ones disheartened by news of the tariffs. Speaking to the potential detriment associated with the tariffs, Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, stated:
We are going to consider every option to reverse this harmful approach. We also will be talking with leaders in the next administration, regardless of who is president, about the harm of solar tariffs in the context of the COVID pandemic, a threatened economy and a critical need to address climate change.
From Washington to Wall Street, investors found more disheartening news in the form of analyst ratings and price targets. On Oct. 7, Piper Sandler initiated coverage on the stock with a neutral rating and a $70 price target. For some context, the stock had closed at $78.57 on Oct. 6, according to Thefly.com.
Spooking investors right before Halloween, Jon Windham, an analyst at UBS, downgraded the stock to sell from neutral on Oct. 27. In addition, Windham assigned a $43 price target on shares, representing downside of about 22% from where they were trading at the time of the analyst's rating.
Although investors saw overcast clouds in October following news of the solar tariffs and analyst downgrades, Sunrun remains one of the more compelling growth opportunities for investors interested in the renewable energy space -- especially after its acquisition of Vivint Solar. Therefore, investors should recognize the tariffs and analysts' actions as catalysts affecting the stock merely in the short term -- not an indication that the company's future remains any less bright.