Wells Fargo downgraded Generac Holdings to equal weight from overweight, saying that the company could miss its ambitious goals for the second half of 2023.
Generac may be a bit too optimistic about its prospects going forward, according to Wells Fargo. Analyst Praneeth Satish downgraded the stock to equal from overweight, noting the power generator maker could fall short of its aggressive 2023 guidance. He reiterated his target price of $135, implying only a 3.9% upside from the stock's closing price of $129.91 on Thursday.
"This equates to quarterly EBITDA more than tripling from Q1 to Q4," the analyst wrote on a Friday note. "Ultimately, this seems aggressive to us, as there's limited visibility into installation capacity growth and clean energy challenges." Wells Fargo's base case assumes a more moderate growth rate for the next two years, forecasting revenue to decline 12% in 2023 before growing 11% in 2024.
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