Citi Raises Price Target on Generac Holdings
Citi has raised its price target on Generac Holdings, a leading manufacturer of power generation equipment, from $124 to $128. However, the firm maintains a Neutral rating on the stock. This update comes ahead of Generac’s upcoming fourth-quarter earnings report, as the analyst revises their estimates for the company.
According to Citi, residential sales for Generac are on track as expected. However, there are signs of potential weakness in the first quarter of 2024. In the commercial and industrial (C&I) segment, the analyst sees risks that could result in performance below market expectations for the year 2024. Despite these risks, the expected weaker revenues from the lower-margin telecom and rental businesses in the C&I sector could positively impact Generac’s overall gross margins.
Citi has made slight adjustments to its revenue and earnings per share (EPS) forecasts for Generac in 2024, placing them just below the consensus. This conservative estimation takes into account the anticipated challenges in specific business segments, while also recognizing the potential for improved profitability due to changes in the company’s revenue mix.
Investors and market watchers will be awaiting Generac’s earnings release to assess the company’s performance and compare Citi’s projections with actual results. The revised price target reflects cautious optimism, acknowledging Generac’s margin dynamics in a complex market environment.
Analyst comment
Neutral news. Analysts expect potential weakness in Q1 2024 and risks in the C&I segment, but also anticipate improved profitability from lower-margin businesses. Citi’s revised price target reflects cautious optimism. Investors will await Generac’s earnings release for performance assessment.
