On Thursday, Benchmark confirmed its Buy rating and a $70.00 stock price target for Winnebago Industries (NYSE:WGO), representing potential upside from the current price of $51.70.
The endorsement comes as the recreational vehicle manufacturer, currently valued at $1.5 billion, prepares to unveil its first-quarter 2025 earnings on Friday, December 20th, before the market opens. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value metrics.
Winnebago's management provided fiscal year 2025 guidance for the first time, marking a significant move for the company. The analyst's evaluation takes into account recent discussions with investor relations, insights from the FLIBS boat show where they met with the management team, peer earnings releases, and field checks with local dealers.
InvestingPro data reveals the stock has experienced significant volatility, with an 8.71% decline over the past week and is currently trading near its 52-week low of $49.68.
The analyst from Benchmark highlighted the importance of a turnaround in profitability, especially in gross margins, which have seen a decline over the past six consecutive quarters. InvestingPro data confirms this challenge, showing current gross profit margins at 14.58%.
Stability in inventory turns has been noted, shifting the focus to unit sales and average selling prices (ASPs). These metrics are experiencing varying trends across Winnebago's three main segments: Towable, Motor, and Marine. InvestingPro subscribers have access to 12 additional key insights about WGO's financial health and market position.
The upcoming earnings report is anticipated to provide further clarity on the company's financial health and its ability to navigate the conflicting dynamics within its diverse product segments.
With analyst price targets ranging from $55 to $80, investors and analysts alike will be closely monitoring the release to gauge the company's performance and future outlook. For comprehensive analysis and detailed metrics, access the full WGO Pro Research Report, available exclusively on InvestingPro.
In other recent news, Winnebago Industries experienced a significant earnings miss for the fourth quarter, with adjusted earnings per share (EPS) of $0.28, a stark decline from the previous year's $1.41 and notably below the consensus estimate of $0.93. Furthermore, the company's revenue dipped by 6.5% to $721 million, falling short of the consensus by $10 million.
Analysts from various firms, including CFRA, BMO Capital, Truist Securities, and Baird, have adjusted their outlook on Winnebago, with CFRA maintaining a $50 price target, while BMO Capital, Truist Securities, and Baird reduced their price targets but maintained positive ratings.
In addition, Winnebago announced the resignation of board member Richard D. Moss, effective at the upcoming annual shareholders' meeting. The company has yet to announce a successor. Despite the challenges, Winnebago projects a modest revenue increase and a 10% rise in adjusted EPS for fiscal 2025. In the fourth quarter, the company generated $30 million in free cash flow, returning $19 million to shareholders.
These recent developments reflect the current state of Winnebago Industries. Analysts have adjusted their projections based on the company's recent performance and future outlook. It is important to note that these changes are based on the analysts' interpretations of the company's financial health and do not reflect any personal opinions or predictions.
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