Several Analyst Firms Raise Generac Price Target After Q3 Results

Roth Capital analyst Philip Shen raised the price target on Generac Holdings Inc. 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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