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How Do Analysts Rate Sunrun ahead of Its 3Q16 Results?

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Nov. 20 2020, Updated 11:55 a.m. ET

Analysts’ ratings

Of the 11 analysts covering Sunrun (RUN) stock, nine analysts (81.8%) gave the company a “buy” rating. Two analysts (18.2%) rated it a “hold,” and there weren’t any “sell” ratings on Sunrun’s stock on November 4, 2016.

Since the release of Sunrun’s (RUN) 2Q16 results, one analyst revised the company’s target price upward. However, there weren’t any downward revisions.

On November 4, 2016, Sunrun’s consensus 12-month target price was $10.91. This indicates a nearly 132% return potential considering a $4.71 closing price on November 4, 2016.

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Sunrun’s consensus estimates

Analysts expect Sunrun to report higher 3Q16 revenue when compared to 2Q16. They see a nearly 10% increase in consolidated revenue on a quarter-over-quarter basis, as well as a nearly 63% increase when compared to its 3Q15 revenue.

Sunrun is in its growth phase and is a rapidly growing company. Therefore, it’s reasonable to compare quarter-over-quarter data rather than year-over-year results. Analysts expect improved EBITDA[1. earnings before interest, tax, depreciation, and amortization] on a quarter-over-quarter basis.

This is in line with the company’s continued focus on cost reductions and increasing operational efficiency across revenue-generating segments. On June 30, 2016, Sunrun’s (RUN) total cost per watt stood at $3.67 when compared to Vivint Solar’s (VSLR) $2.94 and SolarCity’s (SCTY) $3.05.

Among the major downstream solar (TAN) companies, analysts recommend a “buy” for Sunrun. The recommendation was primarily due to the company’s strong growth rate in the residential solar sector and diversification in its business.

Notable recommendations

Among the 11 firms covering Sunrun stock, Morgan Stanley (MS) gave an “overweight” recommendation on the stock with a price target of $8 assigned on August 12, 2016. Credit Suisse gave an “outperform” recommendation on the stock with a price target of $18 on November 3, 2016.

However, Goldman Sachs (GS) gave a “neutral” recommendation, and Barclays has an “equal weight” rating on the stock with price targets of $10 and $7, respectively.

In the next part of this series, we’ll analyze analysts’ 3Q16 revenue estimates for Sunrun. We’ll find out whether these recommendations are conservative or optimistic.

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