Rochdale Research raised its rating on Brunswick Corp. shares from hold to buy.
"Investors with a longer-term horizon should consider initiating positions at the current price. Our 18-month price objective is $8, or 20 times our 2011 estimate of 40 cents per share," analyst Hayley Wolff wrote in a report. "In prior troughs, Brunswick has traded at 18 to 20 times, so this is in line with historical levels. In our opinion, the perception exists that Brunswick will not be able to weather the storm in the marine industry."
"We disagree with that view," she added.
Wolff wrote that Rochdale believes Brunswick's cash position will be solid when it reports its second-quarter earnings results today.
"Second, we believe the company will be a winner in a smaller industry. Manufacturers and dealers are going out of business at an accelerating rate, and this should reach a high point in [the third quarter of 2009]," she wrote. "After the dislocations of inventory getting dumped in the channel work their way through, BC will be a net winner."
Brunswick shares were trading at $6.14 early this afternoon.