Wells upgrades Generac on data center backup power growth

Wells Fargo upgraded Generac (GNRC) to Overweight from Equal Weight with a price target of $195, up from $186. The recent pullback in the shares creates a “near-free call option” on the company’s data center growth, the analyst tells investors in a research note. The firm believes Generac’s growth outlook for diesel generator sets is accelerating as backup power for artificial intelligence data centers. Wells says Generac’s current valuation does not fully reflect its potential upside tied to diesel generator sales for data center backup power.