Goldman Sachs Downgrades Generac Holdings (GNRC) to Sell, Sees Growth Downturn

February 15, 2013 7:09 AM EST
Get Alerts GNRC Hot Sheet
Price: $38.56 +0.52%

Rating Summary:
    3 Buy, 8 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 29 | Down: 30 | New: 23
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Goldman Sachs downgraded Generac Holdings (NYSE: GNRC) from Neutral to Sell with a price target of $29.00 (from $38.00).

The firm sees a significant organic growth downturn and downside to consensus 2014-15 estimates for a stock trading at a significant growth multiple.

"We believe (1) home generator demand will peak in 1H13, (2) consensus 2014-2015 estimates anchor to peak storm demand, and (3) multiple contraction is a risk for a growth stock trading at 12x EV/EBITDA on our 2014 estimates," the analyst said. "We are constructive on GNRC’s capital deployment and share gain opportunities, but believe the stock is discounting growth off peak demand."

The firm cut FY13 EPS from $2.48 to $2.01 and FY14 EPS from $1.44 to $1.43.

For an analyst ratings summary and ratings history on Generac Holdings click here. For more ratings news on Generac Holdings click here.

Shares of Generac Holdings closed at $35.66 yesterday.

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