Cautious Outlook for Sunrun Amid Tariff and Inflationary Pressures Justifies Hold Rating

Analyst Andrew Percoco from Morgan Stanley maintained a Hold rating on Sunrun (RUN – Research Report) and keeping the price target at $11.00.

Andrew Percoco has given his Hold rating due to a combination of factors impacting Sunrun’s financial outlook. The company delivered strong first-quarter results, exceeding expectations in solar and storage additions. However, the management’s guidance for cash generation in 2025 suggests a trend towards the lower end of their projected range if current tariffs remain in place, which introduces a level of uncertainty.
Furthermore, while Sunrun is taking steps to mitigate tariff exposure by sourcing a significant portion of its equipment domestically, the potential inflationary impact on capital expenditures could affect margins. The company’s ability to maintain pricing power in the residential solar market may be constrained by the existing cost of capital environment. These factors contribute to a cautious outlook, justifying the Hold rating as the company navigates these challenges.

Based on the recent corporate insider activity of 100 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of RUN in relation to earlier this year.