BMO Capital Downgrades Sunrun (RUN) to Underperform After House Passes 'One Big Beautiful Bill'
On May 22, BMO Capital analyst Ameet Thakkar downgraded Sunrun Inc. (NASDAQ:RUN) from Market Perform to Underperform. The analyst also reduced the price target on the stock from $9 to $4.
The rating comes after the US House of Representatives passed the 'One Big Beautiful Bill Act' today, which now heads to the Senate for consideration.
A field of solar panels glistening in the afternoon sun, symbolizing the company's renewable energy ambitions.
The firm says that if the bill is adopted it puts Sunrun Inc.'s (NASDAQ:RUN) ability to claim the solar investment tax credit on residential solar leases in jeopardy for fiscal 2026 and beyond. This credit has been a major financial incentive for the company. If the bill passes it will remove the 30% federal solar investment tax credit for taxpayers who install solar rooftop systems, including those on leased residential solar installations.
While the bill is under the Senate's consideration and can go through multiple iterations. However, Thakkar notes that there is limited political will to change the residential credit section. The firm notes that 90% of Sunrun Inc. (NASDAQ:RUN) customers use third-party ownership structures, through which the company retains tax credits when homeowners lease or rent solar equipment. Therefore, the implementation of this bill causes a material risk to Sunrun Inc.'s (NASDAQ:RUN) business model.
While we acknowledge the potential of RUN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than RUN and that has 100x upside potential, check out our report about the .
READ NEXT: and .
Disclosure: None
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
32 minutes ago
- Business Insider
What A-list economists are saying about Trump's tax bill as Musk rebels against it
Elon Musk has departed his role as a "special government employee" in Trump's White House — and he's using his time outside the administration to hammer the GOP spending bill that's a cornerstone of the president's agenda. "This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination," Musk wrote on X earlier this week. Trump responded by saying Musk's criticism of the legislation is "disappointing." President Trump's tax bill will likely face a vote in the Senate in the coming weeks after passing the House in May. It would reduce the tax rates of lower-income workers, particularly those earning less than $107,200, and eliminate taxes on tips, social security, and overtime. The bill would also cut spending on social programs like Medicaid and SNAP benefits, which provide food assistance to low-income Americans. Like Musk, investors and economists are seemingly concerned that the bill will cause the national debt to balloon and further widen the US budget deficit. The non-partisan Congressional Budget Office said this week that it would grow the deficit by $2.4 trillion over the next decade . Trump and his allies have pushed back, arguing that higher economic growth from lower taxes would help boost government revenue. Here's what top economists are saying about the bill. Phillip L. Swagel, director of the Congressional Budget Office Despite the lower tax rates for low earners, Swagel said in a May 20 letter that the bill would negatively impact poorer Americans. "CBO estimates that household resources would decrease by an amount equal to about 2 percent of income in the lowest decile (tenth) of the income distribution in 2027 and 4 percent in 2033, mainly as a result of losses of in-kind transfers, such as Medicaid and SNAP," he wrote. "By contrast, resources would increase by an amount equal to 4 percent for households in the highest decile in 2027 and 2 percent in 2033, mainly because of reductions in the taxes they owe." William McBride, chief economist at the Tax Foundation McBride, along with several colleagues at the non-partisan Tax Foundation think tank, said in a May 23 report that while the bill would support economic growth, it wouldn't be enough to offset the revenue loss from tax cuts. "Our preliminary analysis finds the tax provisions included in the House-passed bill would increase long-run GDP by 0.8 percent," the report said. "The bill's tax and spending changes would increase the 10-year budget deficit by $2.6 trillion from 2025 through 2034 on a conventional basis before added interest costs. On a dynamic basis, accounting for economic growth, the deficit would increase by $1.7 trillion over ten years before interest costs." It continued: "The bill's tax provisions alone would reduce federal tax revenue by $4.1 trillion from 2025 through 2034 on a conventional basis before added interest costs. On a dynamic basis, accounting for economic growth, the revenue reduction would fall by nearly 22 percent to $3.2 trillion over 10 years before added interest costs." 6 Nobel Laureates Six Nobel Prize-winning economists — including Daron Acemoglu, Simon Johnson, Peter Diamond, Paul Krugman, Oliver Hart, and Joseph Stiglitz — said in a June 2 letter that the bill would worsen wealth inequality in the US. "The combination of cuts to key safety net programs like Medicaid and SNAP and tax cuts disproportionately benefiting higher-income households means that the House budget constitutes an extremely large upward redistribution of income. Given how much this bill adds to the U.S. debt, it is shocking that it still imposes absolute losses on the bottom 40% of U.S households," the letter said. "The House bill addresses none of the nation's key economic challenges usefully and exacerbates many of them," it added. Ken Rogoff, professor of economics at Harvard University Rogoff, former chief economist at the IMF, cast doubt on the notion that the bill would boost growth in a piece for Project Syndicate this week. "Trump and his acolytes argue that his "big, beautiful bill" will supercharge economic growth, generating enough revenue to make up for sweeping tax cuts. But history offers little support for such claims," he wrote. "While both Democratic-led spending sprees and Republican-backed tax cuts have fueled the growth of US debt over the past two decades, tax reductions have accounted for the lion's share of the increase. Moreover, the notion that tax cuts pay for themselves was already discredited in the 1980s, when President Ronald Reagan's tax cuts led to soaring deficits rather than self-sustaining growth." He added: "Will America's rising debt ultimately trigger a full-blown crisis? Perhaps, but a continued upward drift in long-term interest rates is more likely." Desmond Lachman, senior fellow at the American Enterprise Institute Lachman, a former IMF official who currently works for a conservative-leaning think tank, said in a June 4 post that rising bond yields, a declining dollar, and appreciating gold prices could be harbingers of an economic crisis brought on by Trump-driven policy volatility. Trump's tax bill is adding to investors' fears due to its inflationary implications. But one of its clauses undermines confidence in the reliability of the returns on Treasurys, he said. "That bill includes a clause that has to be sending shivers down foreign investors' spines. According to Section 899, the US Treasury can impose additional taxes of up to 20 percent on income earned by foreign entities from countries that enact taxes deemed 'unfair' to US interests."
Boston Globe
32 minutes ago
- Boston Globe
Massport pushing to make the state a hub for sustainable aviation fuels
Among the suggestions: Pass legislation to create tax credits that would encourage sustainable aviation fuel blends, storage, and production infrastructure, and new kinds of fuel technologies. While Massport has already asked the US Department of Energy to study the region's current sustainable aviation fuel assets, the task force also wants to identify existing state programs that could be used to support and grow the industry. Davey said he hopes Massachusetts can become a big player in this emerging industry, by fostering startups that can engineer more environmentally friendly alternatives to traditional petroleum-based jet fuel, and by prompting the airlines that use Massport-run Logan Airport to increasingly blend sustainable aviation fuels, primarily biofuels, with their conventional fuel. Advertisement Current technology and regulations allow for up to 50 percent biofuel in jet engine tanks. While its use is rapidly rising, biofuels still represent less than 2 percent of all jet fuel in the US market. Advertisement 'We're not going to stop flying,' Davey said. 'On the flip side, we have a [climate] crisis we need to address.' Davey pitched the idea of creating a sustainable aviation fuel hub to Healey soon after he started as Massport chief executive last year. 'What we found in this journey is that this is not only about improving or reducing gas emissions in Massachusetts,' Davey said. 'It's also an economic development play.' Toward that end, the Massachusetts Clean Energy Center has access to newly created tax credits and capital grants tailored specifically for climate-tech businesses, funded by a $4 billion economic development bond bill that the Legislature passed last year. The working group would like to augment those subsidies with tax credits that could be applied against the state's jet fuel tax to encourage the big airlines to add more biofuels to their tanks. (Airlines paid around $50 million in jet fuel taxes in Massachusetts last year.) Davey said the legislation could include a cap on how much is spent each year, like what has been done in several other states that already offer these incentives. 'I'm cognizant that while we want to solve this problem, the state budget right now is a bit murky,' Davey said. 'We need to balance that uncertainty and all the services we provide [from state government] with this potential incentive.' Some research and development in sustainable aviation fuels is already happening here. Chief growth officer Ben Downing pointed to two startups affiliated with the nonprofit incubator and accelerator where he works, The Engine in Cambridge: Lydian Labs, which is creating carbon-neutral aviation fuels, and Sora Fuel, which aims to make fuel out of carbon removed from the air. Advertisement Downing said Massport's leadership should help spur similar startups, in part because of the opportunities that the port authority could provide to commercialize sustainable fuel technologies by working with suppliers and airlines. 'We've seen Rich and his team lead [on this issue],' Downing said. 'There's a proactive nature to their approach that puts Massachusetts in a really interesting position to be not just a place where these things get invented but potentially where these companies grow. ... That's a model for other key anchor institutions and it's really hopeful and promising for this sector.' Jon Chesto can be reached at
Los Angeles Times
33 minutes ago
- Los Angeles Times
Why Paramount's efforts to settle Trump's lawsuit has drawn mounting political heat
Paramount Global's efforts to appease President Trump could carry a steep price, and not just financially. As Paramount executives struggle to win government approval for its planned sale, the legal risks and political headaches are spreading — from Washington to Sacramento. Three U.S. senators have warned Paramount's controlling shareholder Shari Redstone and other decision-makers that paying Trump to drop his $20-billion lawsuit over an October '60 Minutes' interview with former Vice President Kamala Harris could be considered a bribe. Scrutiny widened late last week when two California Democrats proposed a state Senate hearing to probe details of the drama that has roiled the media company for months. The senators invited two former CBS News executives — who both left, in large part, because of the controversy — to testify before a joint committee hearing in Sacramento to help lawmakers examine problems with a possible Trump settlement. 'I haven't seen a president act in this brazen of a manner,' state Sen. Josh Becker (D-Menlo Park) said in an interview. 'We're concerned about a possible chilling effect any settlement might have on investigative and political journalism. It would also send a message that politically motivated lawsuits can succeed, especially when paired with regulatory threats.' Settling the Trump lawsuit is widely seen as a prerequisite for regulators to finally clear Paramount's $8-billion sale to Skydance Media, which Redstone has been desperately counting on to save her family's fortunes. Trump contends CBS edited the '60 Minutes' interview to enhance Harris' appeal in the 2024 presidential election, which she lost. He reportedly rebuffed Paramount's recent $15-million offer to settle his lawsuit, which 1st Amendment experts have dismissed as frivolous. 'This is a really important case,' said Scott L. Cummings, a legal ethics professor at UCLA's School of Law. 'Legislators are starting to raise alarms.' But whether federal or state politicians could foil a Trump settlement is murky. Experts caution, for example, that it may be difficult, if a settlement is reached, to prove that Paramount's leaders paid a bribe. Congress has grappled with such distinctions before, Cummings said. The U.S. Senate acquitted Trump in February 2020 after the House voted to impeach him for allegedly holding up nearly $400 million in security aid to pressure Ukraine to investigate former President Joe Biden and his son Hunter. Major universities and law firms offered significant concessions to the administration this year to try to carve out breathing room. 'We would have to have a lot more facts,' Cummings said. 'Bribery requires a quid pro quo ... and [Trump and his lieutenants] are always very careful not to explicitly couple the two things together. But, clearly, they are related, right? This is the challenge, legally speaking.' Even if a Paramount payoff could be proved to be a bribe, it's unclear who would prosecute such a case. No one expects the Trump-controlled FBI or others within the U.S. Department of Justice to investigate allegations of bribery. Trump also has a grip on congressional Republicans and the Federal Communications Commission is run by a Trump appointee, Brendan Carr, who in one of his first acts as chairman, opened a public inquiry into whether the '60 Minutes' edits rose to the level of news distortion. It may fall to state prosecutors to dig into the issue, Cummings said. That hasn't stopped nationally prominent progressive lawmakers from sounding alarms. U.S. Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and Ron Wyden (D-Ore.) have demanded Paramount provide information about the company's deliberations or concessions to facilitate a deal with Trump, including whether newscasts were toned down. 'It is illegal to corruptly give anything of value to public officials to influence an official act,' the lawmakers wrote in their May 19 letter to Redstone. 'If Paramount officials make these concessions ... to influence President Trump ... they may be breaking the law.' Redstone and Paramount failed to respond to the senators' questions by this week's deadline, according to Warren's office. Paramount and a Redstone spokesperson declined to comment. Lawmakers often express interest in big media takeovers, and Skydance's proposed purchase of an original Hollywood movie studio and pioneering broadcaster CBS could be an industry game changer. But this time, interest is less focused on vetting the Ellison family or the deal's particulars and more about determining whether Trump inappropriately wields his power. Trump has demanded Paramount pay 'a lot' of money to settle his lawsuit. The president also has called for CBS to lose its station licenses, which are governed by the FCC. For more than a month, attorneys for Paramount and Trump have participated in mediation sessions without resolution. Paramount offered $15 million but Trump said no, according to the Wall Street Journal. Instead, the president reportedly demanded at least $25 million in cash, plus an additional $25 million in free commercials to pump his favorite causes. He also wants an apology. The latter is a red line for CBS News executives who say they have done nothing wrong, according to insiders who were not authorized to discuss the sensitive deliberations. Paramount's leaders have clashed over settlement efforts, according to the sources. The two California state senators — Becker and Thomas J. Umberg (D-Santa Ana) — hope such fractures provide an opening. Late last week, the pair invited former CBS News and Stations President Wendy McMahon and former '60 Minutes' executive producer Bill Owens to testify at a yet-unscheduled oversight hearing in Sacramento. McMahon exited CBS last month under pressure for her management decisions, including resistance to the Trump settlement, sources said. Owens resigned in April, citing a loss of editorial independence. 'You are being approached as friendly witnesses who may help our committees assess whether improper influence is being exerted in ways that threaten public trust and competition in the media sector,' Becker and Umberg wrote to the former executives. Becker is chairman of the Senate Energy, Utilities & Communications Committee; Umberg heads the Senate Judiciary Committee. California has an interest, in part, because Paramount operates in the state, including a large presence in Los Angeles, Becker told The Times. The controversy over the edits began in October after CBS aired different parts of Harris' response to a question during a '60 Minutes' interview a month before the election. Producers of the public affairs show 'Face the Nation' used a clip of Harris giving a convoluted response. The following day, '60 Minutes' aired the most forceful part of her answer, prompting conservatives to cry foul. Trump filed his federal lawsuit in Texas days before the election, alleging CBS had deceptively edited the Harris interview to boost her election chances, an allegation CBS denies. After returning to the White House, Trump doubled the damages he was seeking to $20 billion. His team claims he suffered 'mental anguish' as a result of the interview. CBS has asked the Texas judge, a Trump appointee, to dismiss the lawsuit, saying the edits were routine. Since then, the FCC's review of Paramount's Skydance deal has become bogged down. Paramount needs Carr's approval to transfer CBS television station licenses to the Ellison family. Paramount has said it is treating the proposed settlement and FCC review on the Skydance merger as separate matters. Experts doubt Trump sees such a distinction. Trump and his team 'essentially are using government processes to set up negotiations that end up benefiting Trump personally in ways that raise corruption concerns,' Cummings said. Paramount's decision could open the company to shareholder complaints. The reason Trump's CBS '60 Minutes' lawsuit has become such a lightning rod is 'because the lawsuit is so ridiculously frivolous,' said Seth Stern, advocacy director for the Freedom of the Press Foundation, which owns Paramount shares and has vowed a lawsuit if the company capitulates. 'This is so transparently an abuse of power — a shakedown,' Stern said. Media analyst Richard Greenfield of LightShed Partners suggested that Trump's goal may be about more than his reported demand of nearly $50 million. 'The far bigger question is whether there is any number that Trump would want to settle the CBS/60 Minutes lawsuit,' Greenfield wrote in a blog post this week. 'If Trump's goal is to weaken the press and cause persistent fear of lawsuits that could negatively impact business combinations, keeping the CBS/60 Minutes lawsuit ongoing could be in the President's best interests.' UCLA's Cummings sees another deleterious outcome. A settlement could 'legitimize the narrative that Trump puts out that there's some sort of corruption within these media entities,' Cummings said. 'He could point to a settlement and say: 'I told you they did something wrong, and they now agreed because they paid me this amount of money.' ' 'Even though they would be paying to get this deal through,' Cummings said.
