BMO Capital upgrades Polaris to an outperform rating

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Caption: Polaris acquired Boat Holdings, which includes Bennington Pontoons, Godfrey, Hurricane and Rinker, in June. Bennington is the market share leader in pontoons.

BMO Capital Markets upgraded Polaris stock to outperform from perform, saying that despite “a volatile stock market and macro uncertainty, Polaris’s customer remains optimistic.”

The firm thinks there is a higher likelihood that tariffs will be reduced or removed, rather than increased, and that Polaris has accounted for the impact of tariffs in its fiscal outlook, wrote BMO Capital Markets analyst Gerrick Johnson.

“Our most recent round of channel checks indicates a sequential retail improvement, with dealers associating the uptick to a solid economy and improving weather,” wrote Johnson this week. “We find that dealers have been quite positive on simply being Polaris dealers lately. This has been an ongoing trend we’ve been experiencing over the last 12 months. We find that positive commentary from dealers is generally a leading indicator to retail sales.”

BMO Capital anticipates earnings-per-share target at $6.47, but said the $1.04-per-share removed to account for the impacts of tariffs could be added back in if they are eliminated, putting the expectation at $7.51. However, Johnson thinks the countermeasures taken by the company could increase that total to $7.88 per share.

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