The brokerage firm noted GNRC has massive upside potential
Energy technology concern Generac Holdings Inc. (NYSE:GNRC) is a "top pick," according to UBS. The brokerage firm noted strong growth prospects thanks to the company's clean energy business, going as far as saying that GNRC could see more than 80% upside. In response, the equity was last seen up 2.1% to trade at $249 before the bell.
UBS is joining an overwhelmingly bullish brokerage bunch. Specifically, 16 of the 17 analysts in coverage had a "strong buy" rating coming into today, and there's not a single "sell" on the books. Plus, the 12-month consensus target price of $386.65 is a 58.6% premium to the equity's current perch.
Options traders have favored calls of late, indicating a similarly bullish penchant. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Generac stock's 50-day call/put volume ratio of 1.67 ranks higher than 70% of annual readings. This means long calls have been getting picked up at a quicker-than-usual pace in the last 10 weeks.
Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) sits higher than just 14% of readings from the past year. In other words, short-term options traders have rarely been more call-biased.
These traders are in luck, as the stock's Schaeffer's Volatility Scorecard (SVS) stands at a high 88 out of 100. This indicates GNRC has exceeded options traders' volatility expectations over the past year.
Generac stock is down 30.7% year-to-date, thanks to the recent anxieties surrounding the energy sector in the wake of Russia's invasion of Ukraine. While the 50-day moving average is still set to keep a lid on the shares, the 40-day trendline has emerged during the past few sessions as support. Longer term, GNRC is down 24.2% in the last 12 months.