Brunswick Corp. is gaining domestic share with an ongoing stronger-than-expected U.S. retail marine industry, based on recent sales data, according to Wells Fargo analyst Timothy Conder.
The market share gain, along with solid international sales outside Europe, “should offset likely weaker than management’s current guidance for European sales,” which are projected to be down 15 percent of total revenue, Conder wrote.
“For 2012, we are comfortable that the U.S. industry could be up 6 to 7 percent and the global industry up 3 to 4 percent,” Conder wrote. “Post the election, we believe industry concerns will not be any worse than the current trajectory and could prove modestly more constructive.
“Bottom Line: We would continue to use macro-related volatility to build positions in [Brunswick],” Conder said.
“For 2013: As the industry enters the final months of the retail selling season, concern is building among dealers and manufacturers regarding the tax, fiscal and regulatory environment, post the November election,” Conder wrote. “The degree to which several of these issues are addressed more constructively than the present trajectory, the industry outlook and visibility for an ongoing U.S. marine market recovery, and potential acceleration would be enhanced.”
The analysis comes after Statistical Surveys reported that May 2012 U.S. boat sales, based on 23 early reporting states, are up 16.8 percent year over year in the key powerboat segment driven by aluminum and small fiberglass boats.
Competing U.S. sales monitor Info-Link projected May sales rising between 10 and 11 percent, Conder wrote.
Midsize and larger fiberglass boats were down 17.7 percent, and although anecdotal evidence indicates that this segment remains the most challenged, data are only reflective through April 25 because of significant data entry delays at the Coast Guard, Conder wrote.
Brunswick stock closed at $21.62 Thursday, up $0.62 from Wednesday.
The 52-week high and low were $27.40 and $13.19.