Several Analyst Firms Raise Generac Price Target After Q3 Results
- Roth Capital analyst Philip Shen raised the price target on Generac Holdings Inc. (NYSE:GNRC) to $555 from $500 and maintained a Buy rating on the shares.
- Shen says Generac delivered a weak Q3 and lowered its 2021 guide. Nonetheless, the analyst believes Generac will ultimately continue to work through 2022 on a number of catalysts, including more capacity expansion and the reconciliation bill boosting the company's clean energy business.
- Oppenheimer analyst Christopher Glynn raised the price target to $540 (an upside of 20%) from $500 and maintained an Outperform rating on the shares.
- Glynn says robust orders along with supply chain gating factors drove record backlogs for residential and C&I, with home standby generators backlog well over $1 billion.
- Credit Suisse analyst Maheep Mandloi raised the price target to $527 (an upside of 17%) from $513 as margin pressures are transitory, while demand outlook continues to improve, along with revenue contribution from ecobee acquisition. The analyst maintained an Outperform rating on the shares.
- Canaccord analyst Jed Dorsheimer raised the price target to $575 from $515 and maintained a Buy rating on the shares.
- Dorsheimer says the near-term supply chain, logistics, and inflationary pressures will succumb to the power of the energy resiliency revolution. He believes Generac should be a core holding, and we encourage investors to use this volatility to start or add to an existing position.
- KeyBanc analyst Jeffrey Hammond raised the price target to $540 (an upside of 20%) from $520 and maintained an Overweight rating on the shares.
- Following the company's Q3 earnings and conference call, the analyst walked away increasingly confident on 2022 despite near-term pressures, as large backlog and increasing price flow-through support significant growth and improved margins.
- Hammond was also "impressed" by the progression of the Clean Energy business, supported by recent acquisitions.
- UBS analyst Jon Windham downgraded Generac to Neutral from Buy with an unchanged $500 (an upside of 10%) price target.
- The core of his original bullish thesis around a re-rating in the stock based on the company's diversification into clean energy has now become the consensus view, the analyst tells investors in a research note, adding that the risk-reward on the shares has become "balanced."
- BofA analyst Ross Gilardi downgraded to Neutral from Buy with a $500 (an upside of 10%) price target after mixed Q3 results and affirmed guidance.
- Gilardi says, while the long-term outlook for Generac remains "excellent" and demand for most of its products is still booming, the supply chain constraints have "started to bite."
- Gilardi adds that with an "already rich" valuation of 34-times his expected 2021 EBITDA, he can no longer justify a Buy rating on Generac.
- Price Action: GNRC shares are trading lower by 6.25% at $453.37 on the last check Wednesday.
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