12:07 PM EDT, 10/16/2024 (MT Newswires) -- Sunnova Energy International's ( NOVA ) cash generation potential in Q3 likely had "fewer tailwinds" and is likely to miss market expectations, UBS Securities said Wednesday.

The brokerage cut its Q3 cash balance outlook for Sunnova by 14% to $233 million, implying $20 million cash consumed sequentially. Visible Alpha consensus estimates imply a $45 million cash generation, according to UBS.

The company's Q2 cash generation benefitted from a one-time asset sale of the accessory loan portfolio, contributing $54 million, though, UBS doesn't see that repeating in Q3.

"We would likely view any weakness on the 3Q result as a particularly attractive buying opportunity as we expect a return to significant q/q cash generation in 4Q24E," UBS analysts William Grippin and Jon Windham said in a note to clients.

The firm maintained its buy rating on the Sunnova stock, with a price target of $18.

"We see [Sunnova] as a relative share gainer in the [residential] solar market with continued share price upside potential as [Sunnova] executes on strengthening the balance sheet," the analysts said.

The company's shares were down 1.6% in recent trading.

Price: 6.13, Change: -0.10, Percent Change: -1.61