Stifel cuts Generac stock price target to $195, maintains Buy rating

On Thursday, Stifel analysts adjusted their outlook on Generac Holdings (NYSE:GNRC), lowering the price target to $195 from $200, while reiterating a Buy rating on the stock. This adjustment comes after Generac reported first-quarter 2025 earnings, which included a significant EBITDA beat of $729.5 million. The company’s performance was driven by higher-than-anticipated revenue and margins, with current gross margins at 39.6%. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, with 8 analysts recently revising their earnings expectations downward.

Generac’s strong start to the year was slightly overshadowed by a cautious revision of its full-year 2025 outlook. The company now expects revenue growth to range between 0-7%, a slight decrease from the previously forecasted 3-7%. Additionally, the adjusted EBITDA margin forecast has been narrowed to 17-19%, from the former range of 18-19%. Despite these adjustments, InvestingPro data shows the company maintains a strong financial health score, with liquid assets exceeding short-term obligations and a moderate debt level.

In response to these updates, Stifel has revised its forecasts for Generac for the years 2025-26. Despite the lowered guidance and the subsequent adjustment in price target, Stifel remains positive on Generac’s stock. The firm’s stance is underpinned by the company’s valuation and the belief that Generac’s long-term growth trends are still firmly in place. Trading at a P/E ratio of 19.7x and having fallen over 32% in the past six months, the stock currently trades at $114.38, significantly below its 52-week high of $195.94.

The analyst, Stephen Gengaro, commented on the rationale behind maintaining the Buy rating, stating, "GNRC delivered a strong 1Q25 EBITDA beat fueled by both better-than-expected revenue and margins. In the face of macro uncertainty, GNRC modestly trimmed 2025 guidance... We are reducing our 2025-26 forecasts and reiterating our Buy based on both valuation and our belief that long-term growth trends remain intact. We are tweaking our target price to $195 target price from $200."

Investors and market watchers will be monitoring Generac’s performance closely to see if the company can maintain its momentum and meet the revised targets in the face of broader economic uncertainties.

In other recent news, Generac Holdings Inc. reported a strong performance for the first quarter of 2025, exceeding earnings and revenue expectations. The company achieved an earnings per share (EPS) of $1.26, surpassing the forecast of $1.02, and reported revenues of $942 million, above the anticipated $923.37 million. Residential product sales saw a notable increase of 15%, contributing significantly to the overall revenue growth, despite a 5% decline in commercial and industrial sales. Generac’s gross margin also expanded to 39.5%, marking the highest first-quarter margin since 2021. In terms of strategic outlook, the company expects a full-year net sales growth of 0-7% and plans to counteract a projected $125 million tariff impact in the latter half of 2025 with price increases. Generac is also gearing up to launch its next-generation home standby lineup in the second half of the year. Meanwhile, analysts from firms like Canaccord and Baird have shown interest in the company’s market strategies and product launches, particularly in the data center segment. These developments indicate a dynamic period for Generac as it navigates tariff impacts and market demands.

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