Impact of Twin Hurricanes on Generac's Portable Generator Supplies

Increased Demand for Portable Generators

The recent onslaught of Hurricane Helene and Milton on the US Southeast has led to widespread destruction and massive power outages. This has resulted in a surge in sales of portable generators, causing supplies to dwindle to critically low levels for at least one major manufacturer.

Aaron Jagdfeld, the CEO of Generac, revealed in a recent interview with Bloomberg that the company had sold out of portable power products following the impact of Hurricane Helene weeks ago. Generac is a company that specializes in backup power generation products for residential, light commercial, and industrial markets. The widespread power outages from Florida to North Carolina last month have caused the demand for portable backup generators to skyrocket.

Power Outages and Logistical Challenges

Jagdfeld explained that the number of power outages and their frequency increase interest in their product. As of Thursday morning, after Milton's landfall near Siesta Key, Florida, there were over three million power outages across Florida. Even in Georgia and North Carolina, tens of thousands of people were without power weeks after Helene devastated those states.

The challenge, according to Jagdfeld, is delivering enough portable generators to the affected region after Milton's landfall. This is due to the logistical hurdles caused by the damage to critical infrastructure. He noted that if the generators aren't there yet, they probably won't arrive until a couple of days after landfall.

Generac Shares and Future Predictions

Generac's shares have surged to multi-year highs this hurricane season, particularly in the last few weeks. However, they are still far from the $500 peak seen during the pandemic mania era of cheap money when the stock traded like a 'penny stock.'

Goldman's Jerry Revich shared his predictions for Generac during the earnings season. He noted that search trends are up 75% year on year over the past four weeks, a positive indicator for in-home consultations. His 12-month price is $148, based on 22.1x 2025E P/E.

Recent Google Trends data indicates that internet search demand for "portable generator" has surpassed decade highs. It is suspected that households in these storm-ravaged areas will seek whole-house power backup systems in the weeks and months ahead as a form of insurance against future storms or disasters.

Bottom Line

The recent hurricanes have highlighted the crucial role of portable generators during power outages caused by natural disasters. The surge in demand for these generators has not only affected supplies but also influenced stock prices and market predictions. As we move forward, it will be interesting to observe how manufacturers like Generac adapt to these challenges and how households in affected areas prepare for future disasters. What are your thoughts on this issue? Feel free to share this article with your friends and join the discussion. Don't forget to sign up for the Daily Briefing, available every day at 6pm.