U.S. solar stock ratings undergo a "major reshuffle"! Sunrun becomes Morgan Stanley's top pick

According to the Zhitong Finance APP, affected by market and policy changes, JP Morgan has adjusted the ratings of several U.S. solar stocks. Among them, Enphase Energy (ENPH.US) and SolarEdge Technologies (SEDG.US) have been downgraded to "Neutral," while Sunrun (RUN.US) has been listed as a preferred stock. JP Morgan has downgraded Enphase Energy's rating from "Overweight" to "Neutral," and lowered the target price from $64 to $37 to reflect the downward pressure on stock prices and profit margins caused by the industry's shift towards third-party systems. However, they still believe the premium is justified, as Enphase is one of the few upstream solar companies that consistently generates profits, produces cash, and has a net cash position. However, JP Morgan analyst Mark Strouse believes that the recent U.S. residential solar market may lack positive driving factors due to the impact of the "Big and Beautiful" Act, which could potentially adversely affect Enphase's market share and gross margins. JP Morgan has also downgraded SolarEdge Technologies' rating from "Overweight" to "Neutral," setting the target price at $23 due to the stock's outstanding recent performance. So far this month, the stock has risen by 34%. Nevertheless, Strouse still believes that SolarEdge Technologies holds a relatively favorable position in the U.S. residential inverter market, as the residential solar market is shifting towards third-party ownership models, and new foreign entity regulatory rules have reduced competitive pressure. In the residential solar sector, JP Morgan is most optimistic about Sunrun, giving it an "Overweight" rating and raising the target price from $13 to $16 because the visibility of solar leasing/power purchase agreements has improved, allowing the company to still qualify for the 48E tax credit by the end of 2027 and enjoy storage incentives until the end of 2032