Bank of America predicts 40% upside for Generac stock

Bank of America has started covering Generac, a company that makes home backup generators. They set a stock price target of $182, suggesting that the stock could rise by nearly 40% over the next year. The closing price on Friday was $131.52. The bank believes Generac will do well because of more frequent severe weather and an aging population in the U.S. They noted that serious weather events causing over $1 billion in damages are now happening more often, averaging 23 each year. Key states like California, Florida, and Texas have a lot of demand for Generac's products but are currently not well served by the company. In addition to the rising number of weather disasters, the growing population of senior citizens also boosts demand. By 2030, there will be 82 million seniors in the U.S., needing reliable power for medical devices and medications. Bank of America analyst Dimple Gosal pointed out that Baby Boomers lead in buying these generators, but younger generations are starting to do the same for home security and resilience against extreme weather. Generac's generators use natural gas or liquid propane, but the company also sells solar and battery systems. Although the solar market is facing challenges, Generac’s products could create future opportunities. The stock price has dropped about 15% since the beginning of the year, which the analyst sees as a good buying opportunity.