Generac's Outlook Brightens On Q3 Earnings: Analyst Upgrades Stock On 'Attractive Current Valuation'

Shares of Generac Holdings Inc GNRC were climbing higher on Friday, after the company reported its third-quarter results.

Generac Holdings's Q3 earnings report on Wednesday surpassed analyst expectations. The company now appears to be approaching “the end of the home standby inventory workdown,” which has been a headwind for the business since mid-2022, according to Guggenheim Securities.

The Generac Holdings Analyst: Joseph Osha upgraded the rating for Generac Holdings from Neutral to Buy, while establishing a price target of $142.

The Generac Holdings Thesis: While growth is unlikely to return to the pace witnessed in the Covid era, even moderate market growth yields estimates that “suggest an attractive current valuation” for the stock, Osha said in the upgrade note.

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“While channel inventory continues to drag home standby revenue down, GNRC was successful in narrowing the gap between shipments and activations versus levels seen in the first half of the year,” the analyst wrote.

“When coupled with decent demand trends, we should see this part of the business return to growth during the fourth quarter, and shipments should begin to more closely track end demand in early 2024,” he added.

GNRC Price Action: Shares of Generac Holdings had risen by 6.21% to $105.53 at the time of publication Friday.

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