Sunrun has more room to run, according to Wells Fargo. Analyst Michael Blum reiterated his overweight rating on the solar panel maker and lifted his price target by $6 to $14. That implies roughly 28% potential upside ahead for Sunrun shares, which have gained more than 18% this year. According to Blum, Sunrun's cash-generation outlook has stayed strong after the One Big Beautiful Bill Act, the wide-ranging legislation introduced by the Trump administration that cut tax incentives and policy support for renewable energy and clean infrastructure. He continues to view the stock as a top pick in the residential solar space as a result. "RUN's valuation can be broken into two components: a base value that reflects visible cash generation through 2030 secured by safe harboring, and a terminal value that captures longer-term upside that we believe investors are underappreciating," Blum said in a Wednesday note to clients. Blum estimates Sunrun to see $400 million per year of cash generation through 2030. Beyond 2030, Blum sees potential share price upside coming from Sunrun's Battery 48E credit, a federal tax incentive in clean electricity introduced in 2022. The analyst said this credit will remain in place through 2032 and taper off by 2034, providing about $250 million a year in cash generation from 2030 to 2035. "This is now more straightforward to model with OBBBA securing 48E credits via safe harbor, though clarity on the Executive Order remains pending. When discounted at a 10% rate with no terminal value, this equates to $8/sh of value, essentially representing the status quo under the current solar regulatory framework," according to Blum. RUN 1Y mountain Sunrun stock over the past year. Sunrun will also benefit from grid services revenue and recurring cash flow, even after tax credits expire, he added. The stock climbed more than 1% in the premarket.
