✂ Fed’s first rate cut since 2020: Use our free Stock Screener to find new opportunities fastExplore for FREE

Thor Industries holds stock target, outperform rating despite estimate cuts

EditorNatashya Angelica
Published 09/19/2024, 09:47 AM
THO
-


On Thursday, BMO Capital maintained its Outperform rating on Thor Industries Inc. (NYSE: NYSE:THO) shares with a steady price target of $120.00. The firm's recent observations at the Hershey RV show indicated stronger-than-anticipated retail demand and an increase in show attendance year-over-year. Despite these positive signs, BMO Capital has revised its forecasts for the company's fourth-quarter 2024, as well as for fiscal years 2025 and 2026.

The decision to adjust the estimates for Thor Industries stems from the expectation that dealer ordering and original equipment manufacturer (OEM) production rates will likely remain subdued. This anticipated reduction in activity is projected to impact the near-term financial results for the RV maker.

The analyst from BMO Capital noted the positive consumer interest reflected at the Hershey RV show, which is an encouraging sign for the industry. However, the cautious approach towards dealer and OEM activity suggests a more conservative outlook for Thor Industries' immediate financial performance.

Thor Industries, known for its recreational vehicles, has been navigating a dynamic market environment. The updated projections by BMO Capital suggest that while consumer interest remains robust, the company must contend with potential challenges in the supply chain and production processes.

The maintained Outperform rating and $120 price target by BMO Capital indicates a belief in the long-term prospects of Thor Industries despite the near-term adjustments to its financial estimates. The firm's analysis reflects the balancing act between current market conditions and future expectations for the company.

In other recent news, the recreational vehicle industry is grappling with a sales decline, attributed to high interest rates and a shift in consumer behavior. Major industry players, including Brunswick (NYSE:BC) Corporation and Polaris (NYSE:PII) Inc., have seen a downturn in profits, prompting them to adjust their annual forecasts.

D.A. Davidson analyst Brandon Rolle noted the lack of improvement in retail sales for the sector. Polaris CEO, Mike Speetzen, highlighted the financial strains on consumers and the hesitancy of banks to lend as contributing factors to the sluggish retail environment.

In response to these developments, several brokerages have revised their price targets for Brunswick and Polaris. Thor Industries also adjusted its full-year forecast, citing potential weakness extending into 2025. Harley-Davidson (NYSE:HOG) has taken steps to manage inventory levels, reducing dealer inventories by 30%.

Meanwhile, Benchmark initiated coverage on Thor Industries with a Hold rating, suggesting potential investors may find more favorable opportunities in the future. The firm's analysis is based on a Discounted Cash Flow model, estimating Thor Industries' enterprise value at approximately $5.2 billion.

Despite a weaker-than-expected fiscal fourth-quarter guidance and a decrease in third-quarter results, Thor Industries maintains a revised full-year 2024 guidance, expecting consolidated net sales to range between $10.0 billion and $10.5 billion.


InvestingPro Insights


As Thor Industries (NYSE: THO) continues to adapt to market fluctuations, InvestingPro data offers a snapshot of the company's financial health. With a market capitalization of $5.56 billion, Thor Industries is maintaining a P/E ratio of 21.18, which aligns closely with its adjusted P/E ratio over the last twelve months as of Q3 2024 at 20.95. Despite a revenue decline of 16.04% over the same period, the company's dividend yield stands at 1.84%, reflecting a commitment to shareholder returns. Notably, Thor Industries has raised its dividend for 9 consecutive years, showcasing its dedication to consistent shareholder value.

InvestingPro Tips highlight that analysts anticipate a sales decline in the current year, yet the company maintains a strong track record of profitability over the last twelve months. Thor's ability to keep liquid assets above short-term obligations, paired with a moderate level of debt, suggests a stable financial position. These insights are particularly relevant for investors considering the stock's volatility and the analyst's cautious outlook on near-term financial performance. For those seeking a deeper analysis, InvestingPro offers additional tips on Thor Industries, which could further inform investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.