Roth sees DOE loan agreement finalization as ‘meaningful positive’ for Sunnova

Roth MKM notes Sunnova announced the finalization of the DOE loan agreement known as “Project Hestia,” and sees this as a meaningful positive for the company. The firm believes this could lower the cost of ABS financing by about 100bps, and could lower Sunnova’s current weighted average cost of debt from about 8% to 7.75%. This compares with Sunnova’s most recent fully burdened unlevered return of 11.6% from the Q2 call, which Roth thinks is now much higher. The firm reiterates a Buy rating on the shares with a price target of $58.