Generac (GNRC) Plans to Set Up a New Manufacturing Facility
Generac Holdings GNRC recently unveiled plans to set up a new manufacturing facility in Beaver Dam, WI, in association with City of Beaver Dam. The construction of this new facility is aimed at fulfilling increasing demand for GNRC's industrial generators.
The new facility (measuring nearly 320,000 sq. ft) will come up at Highway 151 Business Park, at Kellom Road and Tower Drive. The facility will include a manufacturing unit and an office and is likely to provide employment to about 350-400 people.
Generac will begin construction of new facility later this year, subject to city approval of the project. The construction is expected to be concluded by early 2025.
GNRC is a leading manufacturer of power generation equipment, energy storage systems, and other power products including portable, residential, commercial and industrial generators. In addition, the company manufactures light towers, which provide temporary lighting solutions for various end markets, commercial and industrial mobile heaters, and pumps that are used in the oil & gas, construction and other industrial markets.
Generac Holdings Inc. Price and Consensus
Generac Holdings Inc. price-consensus-chart | Generac Holdings Inc. Quote
Significant changes in energy landscape, drastic climate change, aging power infrastructure and deployment of superfast 5G technology are likely to spur secular growth opportunities for Generac. Frequent product launches and synergies from acquisitions also bode well.
However, at present, the company’s performance is being affected by softness in the Residential products segment owing to elevated field inventory levels for home standby generators and a decline in shipments of clean energy products.
Due to soft demand environment, Generac now anticipates Residential product sales to be lower than earlier expectation during the second half of 2023.
Overall, management now estimates revenues to decline in the range of 10-12% for 2023. Margins are being affected due to unfavorable effect of sales mix. Yet, robust demand for Commercial & Industrial (C&I) products is a tailwind. The company currently expects C&I products’ sales to grow at mid-teens rate compared with the earlier guided range of mid-to-high single-digit growth.
Generac currently carries a Zacks Rank #3 (Hold). Shares of the company have lost 46.5% of their value compared with sub-industry’s decline of 59.1%.
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