Why Wall Street Analysts Love Generac Stock After a New Amazon Deal

Energy technology company Generac (GNRC) saw its shares jump more than 18% intraday on Sept. 17 after a landmark deal with Amazon (AMZN) was disclosed. The major long-term supply agreement underscores that Generac will supply up to $8 billion worth of backup power generators for Amazon data centers, with initial deliveries expected to total $2.4 billion across 2027 and 2028. An Amazon subsidiary was also issued warrants to acquire up to 1,693,745 shares of Generac's common stock at a fixed exercise price. 

This agreement bolsters the emerging data center business that has been Generac’s growth engine. Barclays analyst Christine Cho agrees with this sentiment, saying the “larger-than-expected size of the deal underpins the tripling of manufacturing capacity discussed on the last earnings call.”

Bloomberg Intelligence analyst Christina Feehery believes the deal could lift 2027 EPS 15% above expectations. Feehery also thinks the deal's benefits should offset the dilution from the warrants. JPMorgan analyst Mark Strouse described the deal as encouraging in size and said that, with the backlog secured, he expects further updates on the company’s capacity expansions to support 2027 deliveries.

Evidently, the agreement is seen as a big deal for Generac, with subsequent benefits outweighing the costs. Now, let's take a closer look at Generac Holdings.

About Generac Stock

Generac makes and sells backup power generators and energy management products for homes, businesses, and industrial customers worldwide. Its lineup includes automatic standby generators, portable generators, battery storage systems, smart home energy devices, mobile generators, and industrial power equipment for commercial use. The company also offers aftermarket parts and services to support its products. Generac is headquartered in Waukesha, Wisconsin, and has a market capitalization of $12.24 billion.

Over the past 52 weeks, Generac’s stock has gained 12.3% as investors have rewarded a shift from residential generators toward faster-growing data center and commercial power demand. This year, the stock is up 50% on surging data center demand and the landmark supply deal. It reached a 52-week high of $296.44 on June 25 but is down 31% from that level.

On a forward-adjusted basis, Generac’s price-to-earnings (non-GAAP) ratio of 21.30x is a bit higher than the industry average of 19.45x.

Q2 Profit Climbed as Data Center Backlog Increased

In the second quarter, Generac’s net sales increased 11% year-over-year (YoY) to $1.17 billion, driven by Commercial & Industrial segment external net sales up about 29% to $556 million. The company realized a rapidly increasing data center backlog. Its adjusted EPS for the quarter was $2.91, up 76.4% YoY. 

The company entered into a global supply agreement with a major hyperscale data center operator to provide backup power generators for its data center infrastructure. The company recently finalized product-specific terms under the deal, locking in nearly $700 million of volume for 2027. 

Analysts believe Generac can further improve its bottom line. For the current year, Generac’s EPS (on a diluted basis) is expected to grow 54.3% YoY to $9.78, followed by a 17.5% improvement to $11.49 for the next year. For the current quarter, analysts expect the company’s EPS to climb 31.2% YoY to $2.40. 

What Do Analysts Think About GNRC Stock?

More analysts have expressed optimism about GNRC stock following the landmark deal. Cantor Fitzgerald analysts kept their “Overweight” rating and $333 price target, calling the deal the company’s “most important data center” news since its first hyperscaler win. Analysts noted that the Amazon deal also eases worries about Generac’s data center order pipeline extending into 2028.

Needham analysts also maintained a “Buy” rating and a $283 price target, following the agreement. Needham sees the deal as boosting visibility into 2027 and 2028 demand while also easing concerns over engine sourcing after an August 2026 executive order targeting foreign-made bulk-power equipment. Canaccord Genuity analysts raised GNRC’s price target to $375 from $275 and maintained a “Buy” rating.

Generac has been in the spotlight on Wall Street, with analysts awarding it a consensus “Moderate Buy” rating. Of the 20 analysts rating GNRC stock, a majority of 13 analysts have rated it a “Strong Buy,” one analyst suggests a “Moderate Buy,” while six analysts are playing it safe with a “Hold” rating. The consensus price target of $292.06 represents a 42% upside from current levels. Moreover, the Street-high price target of $375 indicates an 83% upside.

On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.