Winnebago Industries price target lifted at DA Davidson despite ‘very soft’ guidance

DA Davidson lifted the Winnebago Industries (NYSE:) price target to $64 from $60 per share in a note Tuesday, with the firm maintaining a Neutral rating on the stock. The price target increase follows the company’s latest earnings release.

Analysts said the company’s results missed expectations while its second-quarter outlook was cautious.

WGO reported 1Q24 adjusted EPS of $1.06 on revenues of $763 million, down 19.9% year-on-year. The revenue decrease was driven by lower unit sales related to market conditions, product mix, and higher discounts and allowances compared to the prior year, explained DA Davidson.

“Although WGO did not provide official EPS guidance, the company indicated both sales and profitability would be down sequentially in 2Q24, supporting the cautious view we had entering the print,” analysts noted. On its earnings call, WGO indicated 2Q24 sales would be sequentially lower vs. 1Q24, while 2Q24 EBITDA margin would also be sequentially lower.

“The guidance implies a very soft quarter for WGO as production will be shut down for a good portion of the holiday season to help dealers destock inventory,” the analysts added. “The company is forecasting CY24 retail units and wholesale shipments to be ~350,000 units, reflecting a 1:1 restocking fashion.”