Generac develops, manufactures, and sells power generation and energy storage systems for homes and businesses and revealed in its fourth quarter earnings report that it has seen ongoing strong demand for its products. Shares of Generac are up nearly 60% year-to-date, and are 218% higher over the past year.
Demand for Generac's products could get stronger as the ongoing snowstorm that has impacted more than half the country has increased the allure of a back-up generator for many that have lost power.
In a note on Monday, Stifel analyst Stanley Elliott said, "Healthy backlogs suggest additional upside exists barring any supply chain disruptions and particularly in the event of any major storm activity."
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Stifel rates Generac as a "hold" and increased its price target to $340 from $213. The firm said Generac's fourth-quarter earnings results, which beat analyst expectations, showed that the firm is successfully shifting its product portfolio into clean energy, "while capitalizing on the tailwinds in the core home standby category."
Generac saw its fourth quarter revenue jump 29% to $761 million, with adjusted EBITDA growing 52% to $196 million. The firm expects 2021 revenue growth of 25% to 30% and continued strong demand from its back-up generator business.
Bank of America is bullish on Generac, according to a client note viewed by Insider. The bank assigned a $382 price target to the company, representing potential upside of 6% from its intra-day high of $360.
"Generac is already sold out on home standby generation, on the back of the pandemic, a record hurricane season, active forest fire season in California, and countless other power outage events in the last 6-12 months," BofA said.
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The bank said the blackouts in Texas are "further validation of Generac's business model," according to the note.
"Increasingly, consumers can no longer count on their local utility to provide all of the power they need when they need it," BofA said.
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