Jefferies downgrades Generac to Underperform on ‘game changing’ disruption

Jefferies analyst Saree Boroditsky downgraded Generac to Underperform from Hold with a price target of $85, down from $95. Electric vehicle bidirectional charging is a "game changing technology" that will disrupt the back-up power space and limit home and small business generator penetration over the long term, Boroditsky tells investors in a research note. The analyst says this is on top of negative earnings revisions for Generac into 2023 and 2024 as consensus estimates "remain too high." She sees "material downside risk" to the company’s earnings following three years of elevated home and small business generator demand. Boroditsky models for Generac’s residential sales to drop 37% year-over-year in 2023 versus the Street’s estimate of down 13% on field inventory headwinds and a "more muted clean tech outlook given distributor issues and strong competition."