Truist cuts Sunnova Energy to Hold, sees greater return risk from capital raise

Truist analyst Jordan Levy downgraded Sunnova Energy to Hold from Buy with a price target of $11, down from $35, as part of a broader research note on Solar and Energy Storage ahead of the sector’s Q3 results. The sector remains in a phase of valuation rationalization under which balance sheet strength and steady profitability will play an increasingly important role in equity performance, the analyst tells investors in a research note. The firm adds that while the company will continue to take share given their strength in TPO financing, equity price response following Q2 results makes it clear that the market is no longer rewarding outsized growth while companies continue to compete in the “land grab” U.S. residential space. Truist also sees “heightened risk to returns” given the increasingly costly capital raises.