Generac (NYSE:GNRC) stock is falling on Friday after the company was hit with a downgrade from Bank of America.
That downgrade has Bank of America analysts dropping the company from a “neutral” rating to an “underperform” rating. For the record, the consensus rating for GNRC stock is a “hold” based on 26 analyst opinions.
The BofA downgrade came with a lowered price target as well. This has Bank of America dropping its price target from $141 per share to $91 per share. That’s a potential 18.7% downside for the stock. For comparison, the analyst consensus price target is $194.46 per share.
What’s Behind the Bearish GNRC Stock Rating?
Bank of America has a problem with the backup power generation company’s guidance for fiscal 2023. Specifically, the firm believes that the company is too optimistic with its guidance.
For context, Generac is expecting net sales for fiscal 2023 to drop between 6% and 10% year-over-year (YOY). Considering the company is already expecting revenue to drop, Bank of America’s stance suggests that things could get worse for GNRC stock investors.
As of this writing, some 426,000 shares of GNRC stock have changed hands. That’s a drop from the company’s daily average trading volume of about 1.3 million shares. Even so, the stock is down 5.8% as of Friday morning.
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On the date of publication, William White did not hold (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.