Morgan Stanley says Sunrun is 'most compelling clean energy stock,' sees shares doubling

CNBC logo.jpg

Reported by CNBC  - Michael Bloom contributed reporting.

Shares of Sunrun jumped more than 10% on Wednesday after Morgan Stanley reiterated its overweight rating on the company, calling it “the most compelling clean energy stock” across the firm’s coverage.

His bullish call is based on several factors, including Sunrun’s growth opportunity, as well as its low financing costs. Consumer demand for reliability — especially as Texas and California’s grids come under pressure — should also drive adoption.

“Sunrun is a beneficiary of several megatrends: rising utility costs and falling clean energy and storage costs, grid reliability impacts from climate change and consumer demand for clean energy,” Byrd wrote.

 

Broader adoption of electric vehicles is another upside driver for Sunrun, with Morgan Stanley estimating that this could “create a much value for RUN as RUN’s entire current business.”

In May the company announced a partnership with Ford, whereby the company’s F-150 Lightning pickup truck will offer an at-home EV charger and an inverter. The truck could then power critical products and potentially an entire home should there be a grid outage. The company will also offer solar installations for customers.

“This EV opportunity could be quite meaningful compared to the overall current size of Sunrun’s new customer value creation,” said Morgan Stanley.