Goldman Sachs Weighs in on Solar Stocks

The analyst remains bullish toward solar's structural growth case in the long-term

Deputy Editor
Jun 21, 2022 at 10:17 AM
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Sunrun Inc (NASDAQ:RUN) stock is the best investment for those looking to to capitalize on residential solar growth in the U.S., according to Goldman Sachs. While the brokerage firm lowered its price target on RUN to $36 from $40, it's maintaining a "buy" rating, with a long-term bullish attitude toward the sector's structural growth case. Meanwhile, the analyst downgraded the company's rival SunPower Corporation (NASDAQ:SPWR) to "sell" from "neutral," and lowered its price objective to $13, implying a 25% downside for SPWR due to speculations of softening consumer demand amid higher inflation.

In response to the upgrade, Sunrun stock was last seen 2.8% higher to trade at $24.49. The equity is recovering from a mid-May, post-earnings dip to a roughly two-year low below the $17 area. Today's pop could help RUN overcome the 60-day moving average once again, and chip away at its 30.5% year-to-datse deficit.

Looking at analyst sentiment coming into today, the brokerage bunch was overwhelmingly bullish on Sunrun stock. In fact, of the 11 in coverage, 10 rated it a "buy" or better, without a single "sell" on the books. Meanwhile, the 12-month consensus price target of $47.99 was a significant 96.7% premium to Friday's close.

Regarding SunPower stock, the security was trading at $17.48 at last check, down 2.5%. Today's negative price action puts the equity back below the 20-day moving average, which it notched a close above on Friday. Ahead of today's losses, SPWR was down 14.1% in 2022.

Analysts were already pessimistic toward SunPower stock before today's bear note. Of the 12 in coverage, just two called it a "buy" or "strong buy," compared to nine "hold" ratings and one "strong sell." SPWR's12-month consensus price target of $19.93, meanwhile, was an 11.2% premium to Friday's close. 

 

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