Generac Holdings Shares Surge Amid Hurricane Demand

Generac Holdings (GNRC) shares jumped 8.5% reflecting high trading volume and increased demand due to Hurricane Milton. The company anticipates earnings of $1.96 per share, up 19.5%, with revenues expected to rise by 7.9%, indicating potential strength despite recent EPS revisions.

Date: 08-10-2024

AI Rating: 6

Generac Holdings (GNRC) recently experienced a significant share price surge of 8.5%, attributed mainly to the demand for backup generators following Hurricane Milton. The increase highlights the company's pivotal role in providing essential services during power outages, which often leads to stock appreciation as seen in past similar events.

In terms of financial performance, Generac is projected to report quarterly earnings of $1.96 per share. This represents a strong year-over-year growth of +19.5%. Additionally, the anticipated revenue is expected to reach $1.16 billion, reflecting a growth of +7.9% from the previous year. These figures showcase the potential strength of the company outlook and profitability amidst operational demands driven by natural disasters.

However, it's vital to consider the trend in earnings estimate revisions. Despite the robust earnings and revenue growth forecasts, the consensus EPS estimate has slightly decreased over the past month, indicating a negative trend in earnings estimate revisions. Such trends typically correlate with stock price movements, suggesting that while demand may be increasing due to external factors like a hurricane, internal earnings projections are becoming slightly less favorable.

The market's response to Generac's stock has remained resilient, yet should contingent factors like revised earnings estimates become more pronounced, potential investors must exercise caution. The latest Zacks Rank reflects a #3 (Hold) rating, suggesting that while the stock is holding steady, investors should remain vigilant for further developments.

Meanwhile, in the same sector, Babcock & Wilcox (BW) also experienced notable gains of 13.8% but has a lower Zacks Rank #4 (Sell), indicating varying market expectations within the power generation industry.

Stocks: GNRC BW