Weakness in Generac Holdings Was a Big Opportunity

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FILE PHOTO: U.S. President Biden inspects the damage from Hurricane Ida

Weakness in Generac Holdings (GNRC) may be an opportunity, we noted on April 27.

Especially with hurricane season just around the corner.

Even better, GNRC is incredibly oversold.

Sitting at double bottom support, GNRC is also oversold on RSI, MACD, and Williams’ %R.   However, as we get closer to hurricane season, we believe GNRC could rally back to at least $350 near-term.  Helping, the 2022 hurricane season may be more active than usual, according to scientists at Colorado State University, as noted by NPR.

On April 27, GNRC traded around $230 a share.

Today, it’s up to about $258, as it just starts to pivot from its 52-week low.  All after the company posted better than expected earnings and raised its 2022 sales outlook.  For Q1, 2022, the company posted adjusted EPS of $2.09, which topped estimates for $1.92.  Revenue came in at $1.14 billion, which also beat expectations for $1.09 billion.

According to Barron’s, “The company also increased its full-year 2022 sales outlook, “as a result of better-than-expected production output in the first quarter and additional price actions being taken in the second quarter.” Generac now expects sales to increase between 36% and 40%, which is more than the previous guidance of 32% to 36%.”

Even now, GNRC is still looking attractive, as it pivots from a 52-week low.