On Friday, Canaccord Genuity maintained a Buy rating on Generac Holdings (NYSE:GNRC), increasing the price target to $150 from $140. The firm anticipates that Generac will announce revenue figures of approximately $873 million for the quarter, a 2% year-over-year decline, aligning with the company's guidance for nearly flat year-over-year revenue. This forecast is slightly below the consensus estimate of $888 million.
Canaccord's analysis suggests that 2024 could mark a pivotal year for Generac, following a projected 12% revenue decline in 2023, primarily attributed to inventory challenges. The firm's confidence in a growth resumption is reflected in the revised price target, which is now based on an earnings multiple of approximately 16 times the estimated non-GAAP earnings per share (EPS) of $9.34 for 2025. This adjustment in the earnings multiple is in response to an observed increase in the comparative group multiple to around 16 times the estimated 2025 EPS.
The firm's report includes a detailed matrix of the management's recent guidance metrics for 2024, which are anticipated to remain consistent. Canaccord's revised price target and earnings multiple suggest a positive outlook for Generac's financial performance in the coming years, despite the near-term revenue dip.
InvestingPro Insights
As Generac Holdings (NYSE:GNRC) navigates through its inventory challenges and aims for recovery, recent data from InvestingPro provides a mixed financial picture. The company's market capitalization stands at $7.92 billion, with a high price-to-earnings (P/E) ratio of 40.69, indicating that investors may be expecting high earnings growth in the future. Additionally, the adjusted P/E ratio for the last twelve months as of Q4 2023 is slightly lower at 38.89, which may reflect a more nuanced investor sentiment.
InvestingPro Tips suggest that while the stock is currently in overbought territory, Generac has been able to maintain liquidity with assets that exceed short-term obligations. The company also operates with a moderate level of debt. These factors, combined with a strong return over the last month of 19.3%, could signal resilience in the face of recent challenges.
For investors looking for more in-depth analysis, there are 9 additional InvestingPro Tips available, which can be accessed through the company-specific page at https://www.investing.com/pro/GNRC. Don't forget to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more insights to inform your investment decisions.
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