Gold prices bounce off 3-week lows; demand likely longer term
Investing.com - KeyBanc has reiterated its Sector Weight rating on Generac Holdings (NYSE:GNRC), currently trading at $153.11, as the power equipment manufacturer continues to face challenges in its home standby generator (HSB) business. According to InvestingPro data, the company maintains good financial health with a current ratio of 1.97x, indicating strong liquidity to manage near-term obligations.
According to KeyBanc’s dealer network research, HSB installations have declined year-over-year in the mid-single digits. While in-home consultations remain at healthy levels compared to last year, close rates continue to lag pre-COVID norms, with dealers citing general consumer weakness as the primary sales obstacle. Despite these challenges, InvestingPro analysis shows Generac has maintained profitability with a gross margin of 39.6% and revenue growth of 8.1% over the last twelve months.
Despite above-average outages in the second quarter of 2025, KeyBanc noted these events did not significantly boost demand, as second-quarter outages typically have less seasonal impact on sales. The research also suggests that demand stimulation from the active 2024 hurricane season has faded more quickly than historical patterns following major weather events.
Field inventories for HSB products remain at healthy levels, largely unchanged quarter-over-quarter, with dealers ordering on an as-needed basis to maintain lean inventory ahead of Generac’s upcoming product line upgrade. The company plans to roll out its most significant HSB product line update in over a decade during the second half of 2025, likely in late third quarter or early fourth quarter.
KeyBanc maintains near-term caution heading into Generac’s second-quarter 2025 earnings, scheduled for July 30th, citing the sustained soft HSB market and difficult second-half comparisons. The firm also highlighted potential pressure from tax legislation that would end solar subsidies earlier than previously planned, creating additional challenges for the company’s clean energy segment. For deeper insights into Generac’s valuation and growth prospects, investors can access comprehensive analysis and 8 additional key tips through InvestingPro’s detailed research report.
In other recent news, Generac Holdings Inc. reported a strong performance for the first quarter of 2025, surpassing earnings expectations with an earnings per share (EPS) of $1.26 against the forecast of $1.02, and exceeding revenue projections with $942 million compared to the anticipated $923.37 million. This robust financial performance was driven by a 15% increase in residential product sales, although commercial and industrial product sales saw a 5% decline. Despite the positive earnings, Generac adjusted its full-year 2025 revenue growth outlook to a range of 0-7%, down from the previous 3-7%, and narrowed its adjusted EBITDA margin forecast to 17-19%.
In terms of analyst perspectives, Canaccord Genuity revised Generac’s stock price target to $180 from $200, maintaining a Buy rating, while Stifel lowered its target to $195 from $200, also maintaining a Buy rating, both citing Generac’s market position and long-term growth potential. Furthermore, Generac announced the promotion of Jim Barnes to Executive Vice President – Global Supply Chain, succeeding Roger Pascavis, who is set to retire. Additionally, shareholders approved the re-election of board members and ratified Deloitte & Touche LLP as the independent auditor for 2025. These developments highlight Generac’s strategic adjustments and leadership changes amid a dynamic economic environment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.