Winnebago Industries Q1 2024: Lowered EPS Estimate, But Strong Buy Rating Maintained

Truist Securities's Michael Swartz raised their price target on Winnebago Industries (NYSE: WGO) by 21.4% from $70 to $85 on 2023/12/21. The analyst maintained their Strong Buy rating on the stock.

After assessing Winnebago Industries's Q1 2024 earnings report released on December 20, 2023, Truist Securities lowered its FY 2024 EPS estimate from $7.35 to $6.50, Swartz told investors. However, the analyst added that the firm's projection for Winnebago's earnings power over the next 12 to 18 months remained unchanged.

In terms of Q1 2024 results, Winnebago Industries reported EPS of $1.06, missing the Zacks Consensus Estimate of $1.20 and showing a decline of 48.8% compared to Q1 2023's $2.07. Revenue came in at $763 million, surpassing the Zacks Consensus Estimate of $728 million, but still falling short by 19.9% compared to Q1 2023's $952.2 million. The gross margin declined by 160 basis points year-over-year, standing at 15.2%, while EBITDA dropped by 44.2% to $54.1 million.

Despite these figures, Winnebago's management noted some positive developments. Swartz informed readers that retail demand for some of the company's leading brands has turned positive on a year-over-year basis over the past 30 to 60 days. Additionally, the analyst highlighted that Winnebago has recently seen "lot share gains driven by dealer stocking optimization efforts."

President & CEO Michael Happe commented on the Q1 results, emphasizing the resilience of Winnebago Industries' diversified portfolio and variable cost structure in navigating a sales environment influenced by challenging retail trends and intentional inventory management by dealers. Happe also mentioned the company's commitment to production discipline aligned with market conditions and improving operational excellence. Furthermore, Happe highlighted Winnebago's investments in advanced technology, digital transformation, and IT capabilities, including the inauguration of a new Innovation Center.

Looking ahead, analysts have a consensus forecast that Winnebago Industries will deliver earnings per share (EPS) of $9.93 for the upcoming year. If these predictions hold true, the company's next yearly EPS will represent a 65.2% increase on a year-over-year basis.

Since the release of Winnebago's latest quarterly report on December 20, 2023, the stock price has increased by 1.9%. Year-over-year, the stock has shown strong growth, up by 34.8%. During this period, Winnebago has outpaced the S&P 500, which has seen a 22.4% increase.

Michael Swartz, the Truist Securities analyst who raised the price target on Winnebago Industries, is ranked in the top 3% of Wall Street analysts by WallStreetZen. With an average return of 20.1% and a win rate of 58.3%, Swartz specializes in the Consumer Cyclical sector.

Winnebago Industries Incorporated, headquartered in Forest City, IA, is a manufacturer and seller of recreational vehicles and marine products for leisure travel and outdoor activities. The company operates six segments: Grand Design Towables, Winnebago Towables, Winnebago Motorhomes, Newmar motorhomes, Chris-Craft Marine, and Winnebago Specialty Vehicles. Founded in 1958, Winnebago is a well-established player in the industry.

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