Analyst upgrades Brunswick to 'outperform'

Posted on November 02, 2009

Wells Fargo Securities upgraded its outlook on Brunswick to "outperform" following the company's third-quarter earnings report released last week.

Though Brunswick reported a 36 percent drop in overall sales for the quarter, including a 40 percent decline in marine sales, it also reported the reduction of inventory levels to 21 weeks of supply in the pipeline, an improved cash position up by more than $300 million from the 2008 year-end balance, and a reduction in debt.

"Brunswick is well-positioned as the leading global low-cost manufacturer of recreational marine products with a diverse geographic sales base," said senior analyst Tim Conder in his report. "Investors are yet to fully appreciate [Brunswick's] 1) mitigated risk of further production cuts, 2) lower operating cost structure for enhanced profitability at materially lower production levels, 3) position to gain share throughout marine cycles, and 4) potential peak cyclical [earnings per share] of $1.70 to $3.50."

The range of potential peak cycle earnings per share reflects the base-case and best-case scenarios for demand recovery through 2014, Conder noted.

In early morning trading today, Bruswick stock was trading at $10.55 per share, up from its close Friday of $9.48 per share. Its 52-week high and low are $13.43 and $1.82.

Click here for the full report.

Comments

3 November, 02 2009, 01:51 PM

By RealDealer

Pinocchio, I think your big nose is blocking your vision.  This industry will recover, as it always does, and Brunswick is in a very enviable position - great market share, great brands, AND great dealers.

2 November, 02 2009, 01:48 PM

By Sam S

Somebody paid somebody to say this or somebody is smokin the funny stuff.

Who are they going to sell boats to. With only GE left, and GE closing most of the dealer lines that are out there.

So again I ask, who is Brunswick going to sell boats to.

1 November, 02 2009, 01:19 PM

By pinocchio

OMG!

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