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Generac Holdings (GNRC) Moves 3.2% Higher: Will This Strength Last?

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Generac Holdings (GNRC - Free Report) shares soared 3.2% in the last trading session to close at $176.57. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 31.6% loss over the past four weeks.

The increase in share price can be attributed to increasing demand for the company’s Residential and Commercial & Industrial products. Increasing power outage especially in the United States and Canada is likely to act as a tailwind for its home standby generators.

The company’s thermostats product line is expected to gain momentum owing to increased energy costs and rising temperature. Realization of previously announced price increases and cost reduction projects are further tailwinds.

This generator maker is expected to post quarterly earnings of $3.21 per share in its upcoming report, which represents a year-over-year change of +36.6%. Revenues are expected to be $1.34 billion, up 41.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Generac Holdings, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GNRC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Generac Holdings belongs to the Zacks Electronics - Power Generation industry. Another stock from the same industry, Babcock & Wilcow Enterprises (BW - Free Report) , closed the last trading session 7.6% lower at $6.77. Over the past month, BW has returned -12.2%.

For Babcock & Wilcox, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.15. This represents a change of +36.4% from what the company reported a year ago. Babcock & Wilcox currently has a Zacks Rank of #2 (Buy).


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