22-05-2025
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.
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