RBC Capital's Christopher Dendrinos upgraded Sunrun (NASDAQ:RUN) to Outperform with a $16 price target. There is clearer long-term growth visibility after the recent U.S. Treasury guidance eased regulatory uncertainty, he explained.
Dendrinos noted that the updated framework strengthens demand, supports cash generation. It also positions Sunrun to gain market share as policy shifts favor its third-party ownership (TPO) model.
Treasury clarification on "commence construction" rules removes much of the prior uncertainty. This leaves residential solar safe harbor rules largely unchanged, Dendrinos explained.
Sunrun secured supply and safe harbor volumes through 2029, with plans to safely harbor additional volumes for 2030 starting in 2026, he said.
The analyst said OB3 policy changes could drive more households toward TPO models, benefiting Sunrun as a market leader in leases and PPAs. With the 25D tax credit set to expire at the end of 2025, Dendrinos expects TPO adoption to rise, allowing Sunrun to expand partnerships, selectively onboard new dealers, and grow market share. He forecasts customer additions of roughly 139,000 in 2026, up 20% year-over-year, in line with prior expectations.
On the financial side, Dendrinos highlighted Sunrun's strong cash generation, projecting it to increase from $308 million in 2025 to $550 million in 2026, implying a 15% cash generation yield relative to his $16 price target. Longer-term upside could come from higher utility prices, lower acquisition costs, greater solar-plus-storage adoption, and additional grid services revenue.
For Q3, Dendrinos projected revenue of $585.3 million and EPS of 48 cents.
RUN Price Action: RUN stock is up 10.06% at $15.32 at publication on Monday.
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