Altus Power downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley downgraded Altus Power to Equal Weight from Overweight with a price target of $4, down from $8. The analyst believes the outlook for distributed solar is improving but recommends investors “stay nimble” and position in companies with scale, a proven operating and funding model, and de-risked earnings outlook. The firm has turned more cautious on the pace of Altus Power’s organic asset growth given an “underappreciated amount of inertia” in the commercial and industrial solar sales process. In the near-term, the company’s growth will likely be dominated by asset acquisitions, which are accretive to earnings, but are difficult to predict and could create volatility in the earnings outlook, contends Morgan Stanley.