Investing.com -- Citi downgraded Generac Holdings to Neutral/High Risk from Buy, saying recent announcements have already captured most of the expected near-term catalysts and leave limited upside to estimates.

The brokerage also removed the stock from its 90-day positive catalyst watch.

Citi said Generac’s 2026 revenue outlook came in broadly in line with its above-consensus estimates and already incorporates several tailwinds, including stronger outage-related demand, pricing increases for home standby generators and growth in its ecobee smart home business. The firm said the company’s margin guidance was also stronger than expected and reflects improving performance in its energy technology segment.

The brokerage noted that Generac outlined a large addressable market for its high-output generators aimed at data centers and plans to expand production capacity to about $1.3 billion in annual revenue. The company is also testing the products with hyperscale data center operators.

However, Citi said the announcements mean the key catalysts it had expected have already materialized earlier or more clearly than anticipated.

The firm estimates the market currently values Generac’s legacy generator business at about $160 per share and the data center-focused high-output generator business at roughly $50 per share. Citi said the remaining upside does not justify maintaining a Buy rating.

Citi also incorporated Generac’s planned acquisition of Enercon, which it estimates was valued at about $300 million, or roughly seven to eight times EV/EBITDA. The deal is expected to add about $50 million to $75 million in annual third-party revenue and improve margins by bringing enclosure production in-house.

Looking ahead, Citi said the company’s upcoming analyst day may provide a detailed three-year outlook but is unlikely to act as a major catalyst. The brokerage also placed the probability of a confirmed hyperscaler order for the company’s data center generators at below 50% by March 25.

Citi raised its price target to $237 per share from its previous level, with a bull-case scenario of about $250.