What are investors to make of 2022’s worst-performing S&P 500 stock? Are Generac (NYSE:GNRC) shares toxic, or a prime opportunity for buyers? At least one prominent analyst is willing to stick his neck out and defend GNRC stock, giving shares a positive rating and an ambitious price target.

Based in Wisconsin and founded way back in 1959, Generac supplies equipment for power storage and generation. The company supports the green-energy movement, though few financial traders immediately think of Generac as their go-to alternative fuels investment.

Perhaps clean-energy investors ought to take Generac seriously, though. At least, that’s what Janney Montgomery Scott analysts seem to suggest, as they initiated coverage of GNRC stock with a “buy” rating and a $160 price target.

That’s a bold prediction, but maybe it’s justified. The average price target on Wall Street for Generac shares is $140.67, so it’s possible that the experts see a buying opportunity here.

What’s Happening With GNRC Stock?

Being the worst S&P 500 performer of 2022 so far certainly isn’t something to brag about. GNRC stock moved up 3% this morning, probably due to the positive rating from Janney. However, shares declined from nearly $350 at the beginning of the year to less than $100 recently.

This makes Janney’s $160 price target all the more intriguing. What would prompt such an optimistic outlook, though?

As Janney analyst Sean Milligan explains, Generac is an “established brand” with “an ~80% market share of the residential standby (‘HSB’) generator market.” In other words, investors can get exposure to a near-monopoly in a niche clean-energy industry with GNRC stock.

Furthermore, Milligan asserts Generac is “trading at a discount to industrial peers with long-term exposure to a structurally growing clean energy market.” Thus, as the alternative fuel industry grows, Generac will be poised to expand along with it.

All in all, Milligan considers GNRC stock to be a “free option” on the clean-
energy market’s growth. The implication, it seems, is the reward-to-risk proposition is quite favorable.

So, could this year’s worst performer in the S&P 500 be a winner in 2023? Janney’s analysts evidently think so, and in time we’ll find out whether Generac will reward its loyal shareholders.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.