3 Megatrends Driving Generac Holdings (GNRC) BofA Securities Sees Power Outages Driving Demand

BofA Securities analyst Julien Dumoulin-Smith lowered the price target on Generac Holdings (NYSE: GNRC) to $261.00 (from $325.00) while assuming coverage with the existing Buy rating highlighting 3 “megatrends” from its legacy Home Standby Business that should continue to drive the stock:

1) A significant uptick in frequency and duration of power outages over the last decade
2) A still dominant sustaining BabyBoomer US wallet share where more than 75% of GNRC generator buyers are aged >50
3) New focus on the home as a sanctuary/workplace with the majority of WFH adjustments biased towards white collar

The analyst stated "We emphasize that even while now offering a “best of both worlds” story with its HSB and its PWRCell home batteries, GNRC continues to have the cheapest, highest capacity and best known home reliability solution on the market today. We note that EIA data suggests power outage frequency has doubled on a national basis from 2013-2020 with the duration of those outages up by +50% - critically, this still fails to capture the record 2021 Atlantic Hurricane season and Winter Storm Uri. With forecasts for yet another robust hurricane season ahead, we like where shares are positioned today, with catalysts for relative outperformance into the summer months."

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