Shares of Generac Holdings (GNRC) are pushing higher, as hoped.
As we noted on May 3, one of the reasons it was likely to pop was because of hurricane season.
As noted by NextGov.com at the time, “After two years of relatively mild hurricane seasons, 2023 will see above-average hurricane activity, researchers predict. The forecasters expect the number of major hurricanes this year to be similar to 2017, which saw the extremely intense hurricanes Harvey, Irma, and Maria.”
Now, with Tropical Storm Cindy, and two tropical waves in the Caribbean and Atlantic, it’s ramping up demand for generators.
The other key catalyst for GNRC upside is the heat—which has led to a big increase for its generators in Texas. According to Bloomberg, “Generac, which says it’s the top maker of home backup generators, saw its shares hit a four-month high last week when the Texas grid operator urged residents to conserve electricity to prevent blackouts. The grid operator issued a weather advisory for this week as a punishing heat wave is forecast to linger and drive up electricity demand while residents crank up their air-conditioners.”
In addition, according to CNN, “More than 55 million people from southern Arizona to the Florida coast are sweltering under a worsening heat wave that is expected to expand its reach this week, bringing more dangerous triple-digit temperatures.”
Pushing GNRC higher, analysts at Stifel raised their price target on GNRC from $130 to $135.
Until hurricane season is over, and until temperatures cool off, Generac Holdings could race even higher. GNRC last traded at $144.28 from $110, where we highlighted the idea on May 5.