Analyst: Generac Stock's Headwinds Already Priced In

GNRC is still not far removed from a multi-year low, though

Deputy Editor
Sep 30, 2022 at 10:21 AM
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Cowen and Company initiated coverage on power equipment maker Generac Holdings Inc. (NYSE:GNRC) with an "outperform" rating and a $229 price target. The brokerage firm noted that the housing market's stagnation and economic volatility are already priced in GNRC's value. In response, the stock was last seen up 2.4% to trade at $178.32.

Generac stock is down 56.4% year-over-year, as uncertainties in the energy sector continue to stoke investors' fears. The shares fell to a more than two-year low of $167.11 on Sept. 23, while their 180-day moving average contained a rally back in August.

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 10-day call/put volume ratio of 5.72 ranks higher than 98% 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 lower than all of readings from the past year. In other words, short-term options traders have never been more call-biased.  

Now could be a good time to speculate with options, per Schaeffer's Volatility Scorecard (SVS) that sits at an elevated 87 out of 100. This indicates that Nvidia stock has exceeded volatility expectations during the past year.


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