Goldman Analysts Forecast 140% Upside On Sustainable Tech Play Generac - Generac Hldgs (NYSE:GNRC), Goldman Sachs Group (NYSE:GS)


Generac Holdings Inc. GNRC designs and manufactures standby generators, portable generators, lighting, outdoor power equipment and a suite of clean energy products.

The Analysts: Goldman Sachs GS analyst Jerry Revich maintained a Buy rating on Generac. 

Revich lowered the price target from $406 per share to $346 per share, to reflect the impact of rising rates on valuations.

See Also: 5 On-The-Money Stock Picks For October 13 From Benzinga’s Most Accurate Analysts

Key Takeaways

  • Goldman analysts expect the backlog to bottom within three months, while search trends have been supportive of the view of a 30% peak, leading to a trough in generator demand.
  • With the current stock price of Generac trading around $139.01 per share, the new iteration would allow investors to achieve a return north of 140%.
  • Revich’s third-quarter 2022 EBITDA estimate is 5% below FactSet’s consensus.
  • 2022 EBITDA is expected to be 1% below consensus with an in-line sales estimate, while their 2023 EBITDA estimate is 17% below consensus with a 7% lower sales estimate.

The orders for infrastructure spending have grown by over 44% since March 2022, which points to more public construction over the next nine to 12 months.

There is a rising risk of equipment oversupply, as there has been a tug of war between accelerating prices and slowing input costs from inflation, Revich says.

.adBox { text-align: center; }

With natural disasters such as hurricane Ian knocking out power grids, the demand for generators should remain steady over the long-term.

Generac entered the portable battery market with the Generac GB1000 and GB2000 Portable Power Stations which provide the advantages of clean, emission-free AC or DC power output at the push of a button.

Additionally, on Oct. 4, Generac acquired Blue Pillar, an industrial internet of things (IoT) platform developer, for undisclosed financial terms.

See Also: Why A Short Seller Doubled Down On Critique Of Energy Stock Up 550% In Past 5 Years


Image and article originally from Read the original article here.