Generac (NYSE:GNRC) +2.5% pre-market on Thursday after UBS names the stock as its top pick in alternative energy, rating it as a Buy with a $450 price target, nearly 85% above yesterday's $243.86 closing price.
UBS analyst Jon Windham estimates 2023-24 revenue growth of 7% and adjusted of EPS of 10% for Generac (GNRC), driven by the Clean Energy and C&I segments offsetting moderating demand for home standby power.
"Generac's diverse product suite, dominant market position in home standby power, and existing national installer network are hard to replicate assets," according to Windham.
Concerns over slowing post-COVID home standby power demand are fully reflected in Generac's (GNRC) stock price, the analyst says, with upside from the long-term potential of the company's smart home energy product rollout.
"We see the current valuation as providing an attractive 4:1 upside/downside opportunity with the current share price offering an attractive entry point into a likely long-term, smart home energy winner," Windham writes.
Generac (GNRC) surged a month ago after reporting better than expected Q1 earnings and revenues while raising full-year sales guidance.