Sunlight Financial downgraded to Neutral from Outperform at Credit Suisse

Credit Suisse analyst Maheep Mandloi downgraded Sunlight Financial to Neutral from Outperform with a price target of $1.60, down from $4.00. In addition to company-specific challenges that include near-term cash needs as management explores strategic options or an equity raise, Sunlight also faces higher cost of capital in a strategic review at these prices, and a weaker loan market growth as IRA favors leases, Mandloi tells investors in a research note. The analyst sees upside from potential negotiations with bank partners, loan fee recovery, or M&A with a strategic investor who benefits from Sunlight’s reach in the U.S. residential market and brings in lower cost working capital.