Please ensure Javascript is enabled for purposes of website accessibility

Why Sunrun Jumped More Than 10% Today

By Howard Smith - Apr 16, 2021 at 2:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After a big drop in the stock's price this year, one analyst thinks it's Sunrun's time to shine.

What happened

Shares of residential solar, battery-storage, and energy-services company Sunrun (RUN 1.63%) jumped double digits Friday after an analyst said the stock is a buy. This was in response to a 25% drop since the start of 2021. As of 1:50 p.m. EDT, shares in Sunrun were up 10.3% on the day. 

So what

Investors have spent much of the start of 2021 rotating away from more speculative, high-growth stocks like solar power company Sunrun. But Piper Sandler analyst Kashy Harrison thinks the retrenchment has gone far enough and upgraded Sunrun to the equivalent of a buy rating today. The firm assigned Sunrun shares a price target of $77, representing 63% upside from Thursday's closing price, as reported by Barron's.  

Home-owning couple talking to contractor as worker brings solar panel up ladder to roof.

Image source: Getty Images.

Now what

The stock's decline so far in 2021 doesn't tell the full story. Going back 12 months, Sunrun shares are up more than 355%. Even with negative impacts in solar installations due to the pandemic, Sunrun managed to increase full-year 2020 revenue by 7% versus 2019. It also completed the acquisition of Vivint Solar in October 2020, helping fourth-quarter revenue grow 31% compared to the prior-year period. Management also updated expected annual cost savings from the business combination from $90 million to $120 million by the end of 2021. 

Part of analyst Harrison's thesis is the political shift toward more support for expanding the use of renewable energy, including solar. Even without the passage of a new infrastructure bill or added tax breaks, Sunrun has shown it can benefit from consumer demand that already exists. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sunrun Inc. Stock Quote
Sunrun Inc.
$36.12 (1.63%) $0.58

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.