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More and more consumers are adding solar panels to their rooftops as costs decline and Simmons Energy, a division of Piper Sandler, believes the industry's key players will see rapid share appreciation as momentum behind renewable energy builds. The firm initiated coverage on the solar sector on Wednesday, rating both SunPower and Sunnova at Overweight, with the former earning a "favorite idea" designation.
"A declining cost of capital coupled with a robust growth opportunity should support valuations moving forward," analyst Kashy Harrington wrote in a note to clients. He also initiated coverage on Sunrun with a neutral rating.
Shares of SunPower jumped 13% to hit a new 52-week high following the bullish note, while Sunnova and Sunrun advanced 7% and 3%, respectively.