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Jefferies downgrades Generac, cites rising competition from ‘game-changing’ technology


Growing adoption of bidirectional charging in electric vehicles poses a risk to Generac ‘s business, according to Jefferies. Analyst Saree Boroditsky downgraded the generator maker to underperform from hold, saying that the growth of this alternative technology threatens to cap the long-term penetration of Generac’s home standby generators. Boroditsky also trimmed the bank’s price target to $85 from $95 a share, with the stock falling more than 2% before the bell. “We believe EV bidirectional charging is a game-changing technology that will disrupt the back-up power space and limit HSB penetration over the long term,” Boroditsky wrote. “This is on top of negative earnings revisions into 2023/24 as consensus estimates remain too high.” Bidirectional charging, which enables an electric vehicle to offer power to a house during a blackout, is growing in popularity in the auto industry, with General Motors announcing in October a new business unit focused on this and other energy-focused tools. Ford announced a collaboration with PG & E earlier this year to evaluate the electric F-150’s bidirectional charging capabilities. “Bidirectional charging is expected to become a standard feature with more auto OEMS continuing to make announcements,” Boroditsky wrote. “Our analysis suggests that there will be enough battery power on the road to power all US single-family homes for one day by 2037.” Although Generac has invested in a slew of cleantech initiatives, funneling over $1 billion into the space since 2019, it faces steep competition from larger competitors, they said. Amid this year’s market selloff and a difficult housing market, Generac’s stock is down 71%. The new price target suggests shares could fall an additional 17% from Monday’s close. “In the near-term, the combination of strong demand over the last three years and a weaker housing market will pressure 2023 sales,” Boroditsky wrote. — CNBC’s Michael Bloom contributed reporting

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