KeyBanc cuts solar names to Underweight on ‘overwhelming’ overhang

KeyBanc analyst Sophie Karp downgraded Sunrun (RUN), Enphase Energy (ENPH) and SolarEdge (SEDG) to Underweight from Sector Weight after Senate Republicans last night released a bill that would end tax credits for wind and solar earlier than for other sources. The new version of the bill would end incentives for wind and solar in 2028, though tax breaks for other sources of power including nuclear, hydropower and geothermal would be allowed to remain until being phased out in 2036. KeyBanc cites the “ongoing and overwhelming regulatory overhang” for the downgrades. The Senate bill “fails to deliver optimism” and the solar provisions are “particularly punishing for the sector,” the analyst tells investors in a research note. KeyBanc’s price targets are $31 for Enphase, $6 for Sunrun, and $16 for SolarEdge.