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Analyst sees continued boat sales growth

Analysts at Wells Fargo are projecting year-over-year U.S. boat sales to be up 10 percent in 2012 from last year, with the global industry up 4.5 percent.

U.S. retail boat sales continued at a solid pace, with 8.8 percent year-over-year growth in July in the key powerboat segments, driven by aluminum, outboard and small fiberglass sales.

That’s according to numbers from Statistical Surveys, which were cited in a Wells Fargo report that advised investors to continue building positions in Brunswick Corp. stock.

Sales of aluminum boats above 16 feet increased 9.5 percent year-over-year in July, to 4,467 units, with pontoon boats up 12.6 percent and fishing boats up 5.3 percent.

Smaller fiberglass boats increased 8.7 percent year-over-year, to 4,225 units, including 20.5 percent growth in sales of 11- to 40-foot outboard fiberglass boats and an 8.6 percent decline in sales of 14- to 30-foot inboard and sterndrive boats.

“We continue to believe the industry outlook and visibility for an ongoing U.S. marine market recovery in 2013 would be enhanced once the tax, fiscal and regulatory environment are more constructively addressed post November election,” Brunswick analyst Timothy Conder wrote.

“We believe Brunswick’s significant restructuring, industry-leading (and improved) dealer network, product whitespace (outboard/diesel engines) and international geographic expansion [Brazil] will more than offset this cycle’s likely larger U.S. skew toward small and mid-sized boats, allowing for better-than-expected BC cycle margin marine leverage. We remain comfortable with our 2012-2013 EPS estimates of $1.57/$2.27,” Conder continued. “Bottom line: We would continue to use macro-related volatility to build positions in BC.”

Click here for the full report.

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