SUNL - Citi initiates Sunlight Financial with Buy rating on strong demand for project loans

Shares of Sunlight Financial (NYSE:SUNL) gain 1.9% after Citi initiates coverage on the solar panel financer based on increased underlying demand for residential solar products and an increased propensity to fund projects with loans. "Its business model operates without much credit risk as loans are funded on partner balance sheets and it earns an attractive fee by facilitating the loans and increasing sales activities for the installers," Citi said in a note to clients. Given its expected strong loan funding growth over the "foreseeable future", Citi sees potential to expand  profitability and gain market share. Applies $13 price target, implying 58% upside based on its current trade price. In the chart below, on a YTD basis, the total return for SUNL (-27%) lags Rocket Companies (NYSE:RKT) (-10.5%) and S&P 500 (+18.7%). In January, Sunlight Financial to list on NYSE through business combination with Spartan Acquisition.

For further details see:

Citi initiates Sunlight Financial with Buy rating on strong demand for project loans