Sunrun Stock Is Up 100% This Year. Why Analysts Expect the Gains to Continue.

Jefferies analysts upgraded Sunrun to Buy from Hold with a $21 price target. (Dreamstime)

Key Points

• Jefferies upgrades Sunrun to Buy from Hold and raises its price target to $21 from $11, anticipating a strong finish to 2025.
• Sunrun is expected to achieve $200 million to $500 million in cash generation in the second half of 2025, despite prior cash burn.
• The firm expects Sunrun to expand its market presence as the solar market declines 20% to 30% year over year.

Sunrun shares have risen 100% this year and those gains are set to continue, with the solar panel provider on track for a “strong finish to 2025,” according to analysts at Jefferies.

The firm upgraded shares of Sunrun to Buy from Hold and raised its price target to $21 from $11. The stock Wednesday was up 14% at $19.69, putting it on pace for its highest close in over a year, according to Dow Jones Market Data.

The upgrade came ahead of third-quarter earnings, slated for Nov. 7. Analysts expect a rerating in the stock “as long-awaited cash generation finally materializes,” but see the rally extending further, possibly into 2026.

Crucially, Jefferies expects cash generation in the second half of 2025 to finally materialize in line with the company’s current guidance of $200 million to $500 million.

“We understand why buyside would be skeptical, as RUN has been targeting this level of annualized cash generation since 2Q23 and has only burned cash for the past 3-years,” the firm wrote. But Jefferies is more confident than ever that Sunrun will be able to deliver.

With the passage of President Donald Trump’s One Big Beautiful Bill, the tax credit uncertainty weighing on the stock in the past has dissipated, and the firm sees “very few macro-related obstacles in RUN’s way that would impede growth.”

Sunrun also is due to “deliver on positive growth in the subscriber base,” which is particularly notable in the context of what Jefferies sees as an expected solar market decline in the range of 20% to 30% year over year, analysts wrote.

The firm expects companies like Sunrun, which operate using a model of third-party ownership—leasing out solar panels to homeowners—to snap up wallet share as the competitive landscape narrows. Sunrun, in the firm’s view, is the top residential solar TPO in the U.S. market.

Crucially, IRS Section 25D, also known as the Residential Clean Energy Credit, is set to expire at the end of December. 25D allows taxpayers to claim a tax credit for a percentage of the costs of a new solar energy system.

The expiration is expected to reduce the install market from roughly 4.5 gigawatts in 2025 to as low as 3.5 gigawatts in 2026, Jefferies noted. This change “sets the stage for RUN to expand its presence as peers exit the market.”

Opinions on Wall Street are mixed. Of 26 firms polled by FactSet, 15 rate Sunrun at Buy. Ten rate the stock at Hold, and one rates it at Sell.

While the longer-term outlook has its risks and rewards, the residential solar market itself should return to growth beyond 2026 “as affordability and reliability become increasingly central to consumer decision-making,” Jefferies wrote, adding that “the near-term opportunity for the stock is strong.” Its time in the sun, so to speak, is now.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com