By Elsa Ohlen

Sunrun shares got a boost Wednesday after another analyst turned more optimistic on the residential solar company, saying it could increase shareholder value next year.

BMO analysts led by Ameet Thakkar upgraded the stock to Market Perform from Underperform late Tuesday, hiking their price target to $19 from $10. After adjusting how they model the company's cash generation essentially, they say Sunrun is now in a better cash position to be able to boost shareholder returns via share buybacks or dividends in 2026.

Sunrun stock rose 3.7% to $21.44 Wednesday afternoon, bringing year-to-date gains above 130%.

The analysts' previous negative view on the stock wasn't just about the risk of clean electricity investment tax credits being eliminated, or lower demand for solar panels amid elevated interest rates, Thakkar wrote.

Rather, the team had been skeptical that investors would buy into the way Sunrun calculates its cash generation and whether that would lead to any capital returned to shareholders, BMO wrote.

Thakker, however, cautioned that he still has reservations around the way Sunrun generates cash. The company's cash generation metric isn't only based on cash flow from operations, but is also augmented by inflows of debt and tax equity, Thakkar noted.

Parts of the solar sector have come back to life after a rough start to the year as President Donald Trump returned to the White House. Trump has long advocated for more oil and gas, which has hurt shares of companies providing clean energy sources, such as wind and solar.

The Trump administration also overturned certain tax incentives for clean energy projects implemented under former President Joe Biden, likely to pressure the margins for many solar companies.

Meanwhile, solar companies have largely lost out on the boom in energy demand due to AI and data-center buildouts that have lifted nuclear energy stocks.

Earlier this month, Jefferies analysts upgraded Sunrun to Buy from Hold, also citing an expectation the company will begin to generate cash in line with its guidance of between $200 million and $500 million for 2025.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

October 15, 2025 12:45 ET (16:45 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.