Why Clean Energy Stocks Sunrun And First Solar Are Diverging Premarket Tuesday

The contrasting moves are attributable to analyst action on the stocks. KeyBanc Capital Markets analyst Sophie Karp upgraded Sunrun shares from Sector Weight to Overweight with a $27 price target, suggesting more than 31% upside potential from current levels.

The upgrade was based on several factors: Sunrun’s attractive valuation, positive data from California, the analyst’s belief that residential solar companies can execute well in a higher interest rate environment, and the expectation that the Federal Reserve rate hike will soon come to an end.

On the other hand, Karp downgraded First Solar from Overweight to Sector Weight, as the shares have run up 40% year-to-date, catalyzed by significant tailwinds created by the passage of the Inflation Reduction Act and the subsequent capacity expansion announcements.

"We believe the stock, which now trades at 10x 2025 P/E, has found its NT ceiling," she said.

In premarket trading, Sunrun shares climbed 4.23% to $21.43, while First Solar fell 0.65% to $217.46, according to Benzinga Pro data.

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