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Key Takeaways
- Generac shares jumped Monday after Bank of America analysts stated that the company may benefit from a growing demand for backup energy.
- The bank restarted coverage of Generac with a "buy" rating and a price target implying over 30% upside.
- Analysts say that the market for Generators is expanding to include more Gen Xers and older millennials.
Generac (GNRC), a maker of home generators, saw its shares rise Monday after Bank of America said that the company could see a growing demand for backup electricity amid concerns over severe weather disasters.
Generac stands “to benefit from worsening Grid reliability and increasing severe weather disasters,” said the bank on Monday. BofA reported that weather events worth billions of dollars now occur approximately 23 times a calendar year, almost double the rate in the 2010s.
BofA issued a "buy" rating and a price target of $182 for the stock, implying over 30% upside after shares rose 4.7% to close at $137.67 Monday. Visible Alpha tracks the consensus price target among analysts. It is $175.
Bank of America reported that the market for generators has expanded to include more Gen X customers and older millennials, who “see backup power as an essential for home safety, extreme weather resilience, and remote work,” Bank of America stated. Analysts noted that migration into states with more power outages such as Texas and Florida is also a factor.
Generac shares soared last year amid fears about the impact Hurricane Helene and Hurricane Milton, which occurred in September. The stock has risen by about 17% in the past year.
