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Equities

Goldman Predicts 50% Sunrun Upside, Amid Sector Confidence

Goldman projects 50% upside for Sunrun, amidst mixed earnings and varied analyst ratings across sectors.

By Bill Bullington

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5/9, 10:19 EDT
Apple Inc.
Affirm Holdings, Inc.
ARM Holdings plc
Barclays PLC
Costco Wholesale Corporation
Live Nation Entertainment, Inc.
SolarEdge Technologies, Inc.
Shopify Inc.
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Key Takeaway

  • Goldman Sachs sees a 50% upside for Sunrun, maintaining a buy rating despite Q1 revenue miss, shares up 1.87% to $11.72.
  • Analyst actions include upgrades and positive outlooks for SolarEdge, Affirm, Live Nation, Shopify; highlighting sector resilience.
  • Financial and technology sectors show strong analyst confidence with Deutsche Bank's buy on Barclays and Goldman's price target increase for Arm Holdings.

Market Reactions to Earnings Reports

Wall Street analysts have recently issued a variety of ratings and target adjustments following a series of mixed earnings reports from key players in the technology, financial, and consumer sectors. Goldman Sachs has reiterated its buy rating on Sunrun, despite the residential solar company reporting first-quarter revenues of $458 million, which fell short of the expected $471 million. However, Sunrun's solar and storage installations exceeded guidance, prompting Goldman Sachs analyst Brian Lee to maintain a positive outlook, citing an expected inflection in the second half of 2024 and a shift towards more profitable growth. Sunrun shares have experienced a significant downturn, dropping about 42% for the year, with a slight recovery of 1.87% to $11.72 as reported.

Analyst Insights and Upgrades

In addition to Sunrun, other companies have seen notable analyst actions. JPMorgan has reiterated its overweight rating on SolarEdge following mixed first-quarter results, with revenue exceeding expectations but gross margin and EPS falling short. Affirm received an upgrade to overweight from neutral by JPMorgan, suggesting investors buy the dip, influenced by external factors rather than company fundamentals. Live Nation was upgraded to buy from neutral by Redburn Atlantic Equities, dismissing breakup concerns and highlighting the stock's potential upside. Shopify's rating was elevated to market outperform by JMP Securities, encouraged by the company's investment strategy.

Sector-Specific Highlights

In the technology sector, Arm Holdings received a price target increase from Goldman Sachs, maintaining a buy rating after strong fiscal fourth-quarter results. In the financial sector, Deutsche Bank initiated coverage on Barclays with a buy rating, optimistic about the bank achieving its financial targets. The consumer goods sector saw UBS maintaining its buy rating on Costco following an April sales report that showcased strength in discretionary categories. Bank of America reiterated its buy rating on Apple, emphasizing the expected iPhone upgrade cycle and growth in services revenue.

Street Views

  • Brian Lee, Goldman Sachs (Bullish on Sunrun):

    "RUN continues to expect a 1Q24 trough with an inflection in 2H24... We view the shift towards more profitable growth as a prudent change as management reiterated its cash generation guidance of achieving a $200mn-$500mn annualized run rate by 4Q24 despite the lower solar installations."