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Strong Buy on Generac Holdings - Analyst Blog

Posted
10/4/2013 4:30:00 PM
By: Zacks.com
Referenced Stocks:AIMC;BWC;DOV;GNRC

On Oct 3, Zacks Investment Research upgraded Generac Holdings Inc. ( GNRC ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The affordable power solution provider, Generac Holdings has witnessed rising earnings estimates on the back of its ongoing strong operational performance.

In 2013, Generac Holdings expects to register a 20% year-over-year increase in sales. Strong demand for home standby and portable generators, and an improved outlook for C&I shipments will help the company to achieve its goal.

As declared earlier, Generac Holdings was able to close the acquisition of a leading designer and manufacturer of generators and other engine powered products. This acquisition will enhance Generac's market penetration in Europe, the Middle East and Africa.

With respect to earnings performance, the company has delivered positive earnings surprises in the last 4 quarters with an average beat of 19.64%. The second quarter results of the company were higher than the Zacks Consensus Estimate and the year-ago figure. Strong sales and improved margins boosted the performance of the company.

The Zacks Consensus Estimate for 2013 increased 5.7% in the last 60 days to $2.86. For 2014, the Zacks Consensus Estimate increased 1.2% to $3.45 over the same timeframe. The long-term earnings growth of the company is presently pegged at 10.33% driven by sales growth of 32.85%.

Other Stocks to Consider

Besides Generac Holdings Inc., a few other companies in the sector are also performing well and have a favorable Zacks Rank. These are Dover Corporation ( DOV ), Altra Holdings, Inc. ( AIMC ) and The Babcock & Wilcox Company ( BWC ), each with a Zacks Ranks #2 (Buy).



ALTRA HOLDINGS (AIMC): Free Stock Analysis Report

BABCOCK&WILCOX (BWC): Free Stock Analysis Report

DOVER CORP (DOV): Free Stock Analysis Report

GENERAC HOLDING (GNRC): Free Stock Analysis Report

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Zacks Investment Research