A recent dip in the stock price for Sunrun has made this solar energy play almost too good to pass up, according to JPMorgan. Analyst Mark Strouse reiterated his overweight rating on Sunrun and added the stock to JPMorgan's analyst focus list, saying in a note to clients on Tuesday that the company's shares were poised for a bounce-back in the months ahead. Shares have struggled since a disappointing quarterly report on Aug. 5. "While one of our top long-term picks within our coverage, we also believe RUN is uniquely positioned from a near-term perspective as well," the note said. "The stock has traded down 17% since the 2Q print (SP500 up 2%) primarily owing to investor concerns regarding margins and industry concerns regarding geopolitical disruptions to the supply chain. We expect a strong rebound in profitability during 3Q and 4Q, as elevated 2Q expenses were primarily timing related." Sunrun is also in a strong inventory position, which should allow it to navigate any product shortages that may hit the industry, JPMorgan said. "We believe RUN can meet expected demand into early-22 using inventory on-hand, which we believe positions the company better than tail installers (which account for the majority of US residential solar installations) in the event that supply is disrupting from geopolitical ... or lingering supply chain issues," the note said. JPMorgan maintained its price target of $86 per share for Sunrun, which is 94% above where the stock closed on Tuesday. Sunrun's stock has struggled this year after solar energy plays boomed in late 2020, Shares are down 36% year to date. -CNBC's Michael Bloom has contributed to this report.
A recent dip in the stock price for Sunrun has made this solar energy play almost too good to pass up, according to JPMorgan.