Analyst Dimple Gosai from Bank of America Securities reiterated a Buy rating on Generac Holdings and increased the price target to $221.00 from $207.00.
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Dimple Gosai’s rating is based on Generac Holdings’ strategic shift towards higher-margin and higher-growth segments, which is expected to enhance profitability. The company is adjusting its cleantech business, which previously impacted EBITDA margins, by reducing investment in development-heavy areas and focusing on a more sustainable model. This transition is anticipated to alleviate the drag from the cleantech sector, allowing Generac to concentrate on its core strengths.
Additionally, Generac’s expansion into the data center market presents a significant growth opportunity, with management identifying it as a major potential revenue driver. The company has already secured substantial backlog orders and expects revenue from this segment to grow significantly in the coming years. This, coupled with improved gross margins and stronger performance in energy tech and commercial and industrial sectors, supports the Buy rating as Generac is poised for enhanced financial performance.
Based on the recent corporate insider activity of 43 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of GNRC in relation to earlier this year.