Sunrun Inc (NASDAQ:RUN) stock rose 1.70% (As on October 6, 11:52:07 AM UTC-4, Source: Google Finance) after Truist analyst Jordan Levy downgraded the company to Hold from Buy with a price target of $12, down from $30. Truist Securities analyst warned high interest rates will continue to hurt residential solar panel installers. The firm says that while the company will continue to take share given its strength in TPO financing, equity price response following Q2 results makes it clear that the market is no longer rewarding outsized growth while companies continue to compete in the “land grab” U.S. residential space.
Further, Levy noted that so-called sustainability equities experienced a broad-based selloff recently amid investor concerns about borrowing costs staying higher for longer. He said analysts are re-evaluating the tradeoff of near-term headwinds versus long-term value creation. Levy added that investors are paying more attention to steady profitability and margin improvement, which he indicated was difficult in the current economic environment. He explained that the rising costs associated with high interest rates could not only reduce customer demand for solar panels, but make it harder for the companies to generate cash.
Meanwhile, Management’s focus is on leading the market through sustainable and profitable growth, prioritizing unit cash generation capabilities, while prudently managing working capital needs. Management continues to expect Solar Energy Capacity Installed growth to be in a range of 10% to 15% for the full year 2023. Management expects Solar Energy Capacity Installed growth to be in a range of 255 to 275 Megawatts in the third quarter of 2023. Net Subscriber Value is expected to be materially higher in the second half of 2023 compared to the first half of 2023.
Additionally, in the second quarter of 2023, Customer Additions were 39,755, including 32,389 Subscriber Additions. As of June 30, 2023, Sunrun had 869,464 Customers, including 724,784 Subscribers. Total Value Generated was $399.1 million in the second quarter of 2023. Gross Earning Assets as of June 30, 2023, were $12.6 billion. Solar Energy Capacity Installed was 296.6 Megawatts in the second quarter of 2023. Solar Energy Capacity Installed for Subscribers was 246.7 Megawatts in the second quarter of 2023. Storage Capacity Installed was 102.6 Megawatt hours in the second quarter of 2023.
Networked Solar Energy Capacity was 6,204 Megawatts as of June 30, 2023. Networked Solar Energy Capacity for Subscribers was 5,199 Megawatts as of Jun