Generac Holdings (NYSE:GNRC) jumped 8% Wednesday in reaction to CFRA Research double-upgrading the stock to Strong Buy from Hold. The firm also raised the price target for the stock to $145 from $120.
Ahead of GNRC's Q4 earnings release on February 14, CFRA said it has become more constructive on the company's prospects over the next 12 months.
"We see GNRC beginning to stage a recovery in 2024 on easier comps and progress on inventory drawdowns within dealer channels," said the firm. "Signs of inventory normalization were present in Q3, which we believe will materialize further in 2024 - supporting demand/supply balance."
CFRA calculates the healthcare company's shares are trading roughly 76% below their peak set in 2021, as well as below their historical forward P/E average of 17.7x.
"While we still see demand headwinds/macro risks persisting in 2024, and don't see near-term results eclipsing record sales or EPS set in previous years, we believe upside exists at current levels as GRNC begins to recover from sales and earnings contraction experienced in recent quarters," they added.