Brunswick Corp. remains well-positioned to gain domestic boat share against weakened competitors in boats and international share in diesel and outboard engines, according to a report from Wells Fargo Securities senior analyst Timothy Conder.
“While we expect Q1 2012 to be challenged from a top-line perspective (absence of Sealine revenues, Q1 2011 large Life Fitness order, FX, and reduction of sterndrive engines related to plant consolidation) potential upside could come from small boat shipments and outboard engines,” Conder said. “We would continue building positions in [Brunswick] shares.”
February and year-to-date U.S. retail sales trends remain positive, driven by aluminum and small fiberglass boats. Investors should remember that year-to-date sales represent only 7.5 percent of annual retail units, Conder added; small unit months can produce large year-over-year percentage changes, and consumer confidence remains at low levels for this point in a recovery.
“However, we remain comfortable with our +2 percent outlook for 2012 industry retail unit boat sales, given historic lows of aged channel inventory (over one year old), combined with an ongoing gradual improvement in consumer confidence,” he wrote.
Brunswick stock closed at $25.49 per share in the last trading session. Its 52-week high and low are $27.70 and $13.19.