There's a rosy outlook ahead for Sunrun , according to RBC Capital Markets. The bank upgraded the solar stock to an outperform rating from sector perform. Analyst Christopher Dendrinos' price target of $16 per share, up from $12, implies a potential upside of 15% from here. Shares of Sunrun have surged 50% this year. RUN YTD mountain RUN YTD chart As a catalyst, Dendrinos pointed to guidance issued Friday from the Treasury Department on how renewable projects might qualify for tax credits under President Donald Trump's One Big Beautiful Bill Act. While the act terminates investment and production tax credits for solar and wind projects after 2027, projects that start construction within 12 months of the passage of the act can still claim credits beyond this deadline. "Treasury guidance firms up longer term outlook and the business model," the analyst wrote. "We believe the guidance provides longer term demand visibility and largely removes the uncertainty under Trump's EO calling for stricter Treasury guidance on enforcement of 'commence construction' rules." Furthermore, the expiration of the federal homeowner rooftop solar tax credit in December of this year could drive demand to the third-party ownership market, where a solar company owns and maintains a solar system versus the homeowner, Dendrinos said. This shift would be a tailwind for Sunrun. "With the termination of the 25D credit we believe more favorable economics under a TPO model will drive demand away from non-TPO," Dendrinos said. "We believe this presents RUN with an opportunity to take share and selectively onboard additional dealers and hire others as non-TPO installers look to restructure and partner with a TPO provider." The analyst added that Sunrun's value proposition lies in its cash generation stemming from opportunities such as higher solar adoption, cost reductions in customer acquisition and higher utility power pricing. Dendrinos believes that Sunrun's cash generation forecast for 2026 could approximate to around $550 million, up from 2025's $308 million. — CNBC's Spencer Kimball contributed to this report.
