Citi upgrades Sunnova Energy to Buy ‘entirely on valuation’

Citi upgraded Sunnova Energy to Buy from Neutral with a price target of $14, down from $22. The analyst says the upgrade is based “entirely on valuation.” The stock is down 55% since July 19, and now reflects net customer value discounted at 12% without any credit for the development company, which appears to be a “valuation floor especially as rates stabilize,” the analyst tells investors in a research note. Citi believes Sunnova’s Q3 estimates have downside, but says the stock’s valuation “is too compelling for us to ignore.”