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RBC Capital Markets moved to the sidelines on Sunrun after a major decline in the stock. Analyst Christopher Dendrinos downgraded the solar stock to sector perform from outperform. Dendrinos also slashed his price target by $7 to $5, which suggests downside of 13.5% from Tuesday’s close. RBC’s downgrade comes after solar stocks cratered Tuesday as investors grappled with how the U.S. Senate’s reconciliation bill would impact companies in the sector. Sunrun plunged about 40% in the session, marking its biggest one-day loss on record. Dendrinos said the Senate’s bill keeps language around the proposed elimination of tax credits for residential solar leasing, However, about 70% of Sunrun’s customer base is in storage, which should see credits kept in tact. Still, Dendrinos said this environment makes it hard to see an avenue for Sunrun to get to positive cash generation, especially under the industry’s current cost structure. He said residential solar costs would need to be at least 10% to 20% below current utility rates to entice customers to make the switch, but the analyst said this is likely unachievable. RUN YTD mountain Sunrun, year to date “We believe the longer-term value proposition for RUN is in cash gen which we estimate is more than eliminated with the removal of solar tax credits,” Dendrinos wrote in a Wednesday note to clients. “We believe austerity measures are needed across the industry and RUN’s scale and market positioning puts them in a favorable position to compete,” Dendrinos added. “But the path and timing back to positive cash gen could take time, and we are unsure of industry’s longer-term cost structure and demand.” Sunrun shares fell close to 3% in Wednesday’s premarket. The stock has dropped 37.5% in 2025, putting it on pace to record its fifth losing year in a row.
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