Generac (NYSE:GNRC) received a downgrade from analysts at financial-services firm Guggenheim Securities. The maker of home backup generators and solar equipment was downgraded to Neutral from a previous rating of Buy. The analysts expressed concern over the company’s full-year forecast, indicating a heavier weighting towards the second half of 2024 than they had anticipated.

According to Joseph Osha, an analyst at Guggenheim, “That leaves the company more dependent on a strong second-half performance than we had previously thought. At the same time, the stock has increased by 28% since the beginning of November, as compared to 18% for the S&P 500 (SP500) over the same period.”

Inspecting Generac’s management strategy, Guggenheim suggested the company reconsider its approach to residential energy technology. They emphasized the eventual shift of households towards eliminating carbon emissions over the continued use of fossil fuel-powered generators. The financial-services firm recognized Generac’s investments in anticipation of this shift but expressed disagreement with the company’s current strategy, deeming it problematic.

Guggenheim further criticized Generac’s strategy of acquiring multiple companies to develop a completely integrated home energy technology platform, stating that it has spread the company’s efforts too thin. The strategy encompasses diverse products, from electrical-vehicle chargers to microinverters used to convert electricity into a form that powers lights and appliances.

Guggenheim highlighted a significant opportunity for Generac to develop a battery that integrates with a variety of solar-energy systems from companies such as Sunrun (RUN) and Sunnova (NOVA), indicating the potential for success if the company focuses its efforts sufficiently.

Following the rating change, Guggenheim has suspended Generac’s price target, which had previously been set at $142 a share.

Generac recently reported a 1.4% rise in sales from a year earlier, reaching $1.06 billion in the three-month period ending in December.