Generac Poised To Benefit From Blackouts, Declining Grid Reliability: BofA Analyst

Generac Holdings Inc. (NYSE:GNRC) shares are trading higher on Monday. Bank of America Securities analyst Dimple Gosai reinstated the company with a Buy rating and a price forecast of $182.

The backup power manufacturer is well-positioned to capitalize on worsening weather disasters and declining grid reliability, Gosai says.

With billion-dollar weather events now averaging 23 per year (nearly double the rate of the 2010s), key markets like Texas, Florida, and California remain underpenetrated, representing about 25% of the company’s total addressable market, adds the analyst.

Read: Winter Storm Blair Blasts Millions Of Americans, Triggers Flight Delays, Power Outages, School Closures

In particular, the analyst sees the company’s smart home energy tech, led by Ecobee and storage, as a growth driver.

The analyst expects the over-65 population to reach 82 million by 2030 (vs. 58 million in 2022). This increases the need for reliable power among retirees who depend on medical devices and refrigerated medications.

While Baby Boomers continue to be the primary buyers of home standby generators, demand is growing among Gen X and older Millennials, who value backup power for home security, extreme weather protection, and remote work, adds the analyst.

Additionally, Gosai says that the steady population growth in power outage-prone states like Texas and Florida (1.6%-1.7% annually) highlights the rising demand for resilient energy solutions.

Investors can gain exposure to the stock via AdvisorShares Trust AdvisorShares HVAC and Industrials ETF (NYSE:HVAC) and Macquarie ETF Trust Macquarie Energy Transition ETF (NYSE:PWER).

Price Action: GNRC shares are up 4.15% at $136.97 at the last check Monday.

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