RBC Capital Markets delivered an upbeat report for Brunswick Corp. earlier today, several days ahead of when the company is to report first quarter earnings. At the same time, RBC notes the overall industry continues to face significant challenges.
"With production increasing for the first time in several years, we expect that Brunswick's [profit and loss] will show strong leverage," the report predicts. Q1 results are due out Thursday.
RBC surveyed 185 Brunswick dealers - many of which also carry non-Brunswick lines - and held discussions with key industry contacts.
"Dealer sentiment, while still not great, is clearly on the upswing," the report states, tempering that by noting "significant challenges," such as a slow recovery in new-boat sales and dealer difficulty selling newer boats without incentives.
RBC notes two primary causes of continued pressure on the new-boat market: an overhang of recent model-year used inventory and extremely tight floorplan financing conditions.
The report is titled, "Brunswick Corporation: Check Points to Early Stage Recovery."