Yahoo Finance anchors Seana Smith, Dave Briggs and Brook DiPalma discuss Sunrun shares down more than 6% on Wednesday after Barclays analyst downgraded the stock to Equal Weight from Overweight and lowered its price target .
DAVE BRIGGS: My piece is Sunrun. Barclays sees cloudy days for the solar company ahead, downgrading the stock to equal weight from overweight and lowering the price target to $35 from $44.
Barclays saying in a note, in quotes, “U.S. residential growth would be in the 1920s range this year, but may be more subdued in 24.” The Cut Inflation Act, which President Biden signed into law last August, authorized $391 billion in spending on clean energy and climate change initiatives over the next decade, but Sunrun doesn’t hasn’t been able to take advantage of it for the most part, now down more than 8% in the last 12 months, falling almost 8% earlier in the day, and has now recovered a bit. Still down more than 6%.
ETF Invesco Solar has seen this benefit, however. They’ve seen it all, amassing more than a quarter over the past year. It fell with Sunrun and basically the whole solar industry today.
It’s interesting. I assimilate that and talk a lot about the CHIPS law, as you know. We all thought that chips would benefit from the CHIPS law in the short term. They do not have. And for the most part, we saw the same thing with solar. And why they think that — the theory is, Seana, it was a 10-year window. So the consumer knows I have 10 years to do it and I’m still getting the tax benefits, so why should I rush out and do it when it’s spread out over 10 years? Not as much incentive.
SEAN SMITH: Exactly, and also, it could be quite an expensive decision as well just in terms of the cost you pay upfront. So in this economic environment and people are cutting back, maybe they’re not as willing to shell out all that money up front to get into this space.
But I think it’s interesting when you look at the overall street ratings on this stock because because of this weak performance in 2022, which you were talking about, there’s still 19 buys when there’s so many questions about the uncertainty of the next two…the next two months, at least two quarters.
When you look at the fact that stocks are only priced around $24 a share, I wouldn’t be surprised if some of those 19 buys were downgraded to takes over the next few weeks, given the clouded outlook we’re likely to see from Sunrun.
DAVE BRIGGS: I’m stuck on cheesecake. I really–
SEAN SMITH: It’s hard to follow.
DAVE BRIGGS: My brain shut down.
SEAN SMITH: We struggled today with our picks.
BROOKE DIPALMA: We didn’t even have cake. We just talked about it.
SEAN SMITH: Exactly.