Residential solar energy company Sunrun is now trading at an attractive valuation, according to Citigroup. The bank upgraded Sunrun to buy from neutral at the same time as it actually lowered its price target by $4 to $21, which still implies almost 40% upsidre against Tuesday’s close. Shares are up 8.5% premarket Wednesday after slumping nearly 37% year to date through Tuesday. SunRun is “not getting due credit” for numerous catalysts set to drive the stock higher, analyst Vikram Bagri said in a Wednesday note. He cited the company’s market share gains from its third-party ownership (TPO) shift, path to free cash flow generation, investment tax credit benefits, falling component costs and success at selling battery storage. “Higher rates and [net energy metering] impacts appear to be largely price in,” Bagri said. “CA will face headwinds in ’24, but RUN’s leading > 60% TPO market share and financing runway means consensus expectations for ~6% MW installation growth in FY24 appear achievable as consumers seek out solar [and] storage to save on utility bills,” he added. Bagri said Sunrun’s “net earnings asset value at 6% discount rate” is worth $6 a share excluding renewals, while its free cash flow target of $200-$500 million annually “could be worth ~$11-$13” per share at the low end. Sunrun also has a 37% stake in Lunar and potential from SnapNrack and virtual power plants, Citi said. —CNBC’s Michael Bloom contributed to this report.