Shares of Generac Holdings (NYSE:GNRC), which manufactures and sells power generation equipment and energy storage systems, closed about 5.6% higher on December 28. The sudden jump in GNRC stock followed a Buy recommendation from Sean Milligan of Janney Montgomery. Milligan sees GNRC stock as undervalued, given the substantial decline in its price. His price target of $160 implies a solid 66.25% upside potential.
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GNRC stock has declined by about 73% year-to-date. Notably, it witnessed stellar demand amid the pandemic. Further, the ongoing transition towards renewable energy sources supports its long-term growth. However, a weak housing market, normalization of demand, a slowdown in residential product sales, and inventory issues dragged its stock lower.
Despite these near-term headwinds, Milligan is bullish about the secular growth trends in its core business and expects the company to benefit from its recent acquisitions.
GNRC stock appears undervalued, making it an attractive investment on the price front. It is currently trading at a forward P/E (price-to-earnings) multiple of 10.74, much lower than the sector median of 16.03. Also, it is much lower than the five-year average multiple of 23.11.
Is GNRC Stock a Buy?
On TipRanks, GNRC stock has a Moderate Buy consensus rating, reflecting 12 Buy, six Hold, and two Sell recommendations. Moreover, these analysts’ average price target of $140.67 implies 46.17% upside potential.
Furthermore, GNRC stock has positive signals from hedge funds and insiders. Hedge funds bought 778.1K GNRC stock last quarter. Meanwhile, insiders bought GNRC stock worth $194.5K. Overall, the GNRC stock sports an Outperform Smart Score of eight.
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