Wells Fargo reduces residential solar exposure, downgrades Sunnova

Wells Fargo analyst Michael Blum downgraded Sunnova Energy to Equal Weight from Overweight with a price target of $6, down from $11. The firm says that as the solar sector continues to struggle due to several headwinds, it is getting more defensive with its ratings. Wells upgrade First Solar due to its relative stability and several potential catalysts. The firm downgraded Sunnova Energy (NOVA) as interest rates may stay higher for longer. The analyst is reducing exposure to residential solar. While some companies can afford to wait for rates to fall and the residential solar market to rebound, Sunnova has upcoming debt maturities and tight liquidity, the analyst tells investors in a research note. The firm says the company’s pace of cash generation seems to be tracking below required levels to address debt maturities.