Jefferies reiterated a Buy rating and $286.00 price target on Generac Holdings after the company announced a data center partnership with Amazon that could be worth up to $8 billion. The bank said the deal improves backlog quality and helps address investor concerns about the terminal value of Generac's data center business.
Jefferies analyst Tanner James reiterated a Buy rating and $286.00 price target on Generac Holdings (NYSE:GNRC) following the company's newly announced partnership with Amazon. The partnership centers on an order valued at up to $8 billion. Amazon's initial commitment totals $2.4 billion.
According to Jefferies, the deal improves backlog quality and duration for Generac's data center business. As a result, the bank said the agreement should help address investor concerns over the segment's terminal value.
The financing structure includes warrants issued to Amazon, which Jefferies said aligns interests for supply beyond the initial commitment. The bank said the structure likely protects margins.
Jefferies also calculated that fiscal year 2028 implied consensus revenues to data centers could be more than $1.5 billion below reasonable expectations.
Source: Investing.com
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