Generac Holdings Inc. (GNRC) kicked off the new year with a bang, reporting better-than-expected earnings for its fourth quarter, sending its stock price soaring. The company, a leading manufacturer of power generation equipment, posted quarterly earnings of $2.25 per share, surpassing the analyst consensus estimate of $1.95 per share. Revenue also came in stronger than anticipated, hitting $1.173 billion against an estimated $1.161 billion.
This impressive performance was fueled by surging demand for residential generators, a trend driven by the increasing frequency and severity of power outages. “Our third quarter results outperformed our expectations as elevated power outage activity drove increased shipments of our residential products and strong execution helped to deliver significant margin expansion,” stated Aaron Jagdfeld, President and Chief Executive Officer. “Shipments of home standby and portable generators increased at a very strong rate from the prior year period, more than offsetting expected softness in C&I product sales. As a result, we are updating our full year 2024 guidance to include higher residential product sales with further improvements in adjusted EBITDA margins.”
The positive earnings news resonated well with investors, propelling Generac shares up by 2.4% to $169.47 on Friday. Following the earnings announcement, several analysts adjusted their price targets for Generac. Baird analyst Michael Halloran maintained Generac with a Neutral rating but lowered the price target from $187 to $181. In contrast, Goldman Sachs analyst Jerry Revich reiterated a Buy rating on the stock while increasing the price target from $148 to $193. TD Cowen analyst Jeffrey Osborne also maintained a Buy rating, elevating the price target from $172 to $183.
Generac’s strong Q4 earnings, driven by the rising demand for residential generators, highlight the growing concern about power grid reliability. The company’s optimistic outlook for 2024 suggests that this trend is likely to continue, potentially further bolstering its financial performance in the coming year.
