Sunnova Energy International Inc. (NYSE:NOVA) was downgraded to Market Perform from Outperform at BMO Capital Markets on Friday, with the firm also lowering the stock price target to $25 from $27.
BMO analysts told investors in a note that they have decided to downgrade the stock, following its recent outperformance. NOVA shares are up more than 20% in the last month.
"NOVA has been our preferred idea among residential solar installers given its ability to continue to drive attractive customer growth across the interest rate cycle while maintaining contract margins," the analysts wrote. "NOVA also has significantly less exposure than peers to CA NEM 3.0 as growth slows in the state."
"However, we see these positives increasingly reflected in its stock price relative to peers as NOVA shares have outperformed its peers by ~35-60% and the TAN and S&P by 27% and 7%, respectively, ytd."
The analysts also went on to state that the impact of dealer growth may wane over time, while they are also cautious that likely upcoming financings may weigh on the stock.