On Thursday, BofA Securities initiated coverage on shares of Camping World Holdings (NYSE:CWH), the nation's leading recreational vehicle (RV) retailer, assigning a Buy rating and setting a price target of $30.00. The firm's analysis suggests a potential upside of approximately 43% from the current trading level.
According to InvestingPro data, the stock has experienced significant volatility recently, with a -8.79% return over the past week. The positive outlook is based on Camping World's performance, which has surpassed industry benchmarks across all segments this year, despite analysts' concerns about near-term profitability.
Camping World, with its network of over 200 dealerships, has been recognized for its impressive industry performance. With annual revenue of $6 billion and EBITDA of $249.55 million, the company's success is attributed to its inventory of value-oriented units and a robust contract manufacturing strategy.
Moreover, a resurgence in used sales and margins has contributed to the company's strong market position. InvestingPro subscribers can access detailed financial health scores and 7 additional key insights about CWH's market position.
The analyst from BofA Securities underlined that Camping World is well-positioned to continue gaining market share. This advantage is expected to stem from the company's strategic offerings and its ability to meet consumer demand effectively.
The price objective set by the firm is grounded in an enterprise value (EV) of 12-13 times the anticipated adjusted EBITDA of $325 million for the calendar year 2025. The company has maintained dividend payments for 9 consecutive years, currently yielding 2.38%.
The favorable rating and price target reflect confidence in Camping World's future business prospects. The company's strategic approach to inventory and manufacturing, coupled with the recovery in the used vehicle segment, appears to be driving the optimism about its financial performance going forward.
Investors and market watchers will likely monitor Camping World's progress as it strives to meet the expectations set forth by BofA Securities' coverage initiation. The company's ability to maintain its competitive edge and capitalize on market share gains will be critical to achieving the projected valuation.
In other recent news, Camping World Holdings has reported steady third-quarter revenues of $1.7 billion for fiscal year 2024, despite challenges in used inventory procurement. The company saw a 31% increase in new unit sales, mainly due to a strong performance in Class C RV sales, and the adjusted EBITDA reached $67.5 million.
Camping World also amended its existing credit agreement, extending the maturity date of its revolving credit facility to 2028, a move crucial for the company's financial stability given its total debt of $3.57 billion.
KeyBanc Capital Markets maintained its Overweight rating on shares of Camping World, expressing a positive outlook on the company's medium to long-term opportunities, including organic growth and potential mergers and acquisitions. Despite an 18% decline in used unit sales, Camping World is targeting low to mid-double-digit growth in this area for the upcoming year.
These are recent developments that reflect the company's ambitious plans for growth, with a goal to exceed 15% market share through dealership acquisitions and improved inventory management. Executives at Camping World expect a more stable pricing environment and modest growth in 2025.
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