Financial adviser urges caution on Brunswick


Wells Fargo Securities says investors could be "disappointed" with Brunswick Corp.'s first-quarter 2010 results and advises exercising "caution near-term in initiating/building positions in [Brunswick] shares."

"We believe near-term caution is warranted ahead of Q110 results as we believe the shares' recent move and Street Q110 expectations present a high probability of a near-term pullback," analyst Timothy Conder said in a report.

However, he issued no changes to fiscal-year estimates for 2010 and 2011.

Brunswick's stock stood at $16.39 per share Wednesday in early morning trading, down from a close of $16.45 Tuesday. Its 52-week high and low are $16.62 and $3.36.

In a year-to-date outlook on the industry, the report says March marine retail sales from boat shows, and conversations with industry lenders, appear to be tracking slightly below a 10 percent dip.

"The lower and higher ends of the market appear to be performing the best, with industry weakness remaining most pronounced in the 25- to 40-foot fiberglass segment," the report said. "Retail loan rates continue to show incremental improvement for consumers.

"The industry appears to be experiencing multiple supplier issues (driven by the dramatic downsizing among marine suppliers over the last two years) that is serving to further curtail already limited shipments of new product into the industry retail channel," according to the report. "Brunswick does not appear to be experiencing any broad material supplier issues."

Click here for the full report.