Shares of the Valcourt, Que.-based recreational vehicle maker dropped 6.1 per cent on Friday after it reported in-line first-quarter 2025 EPS of 95 cents, down 60 per cent year-over-year and matching the Street’s expectation. However, it reduced its full-year forecast by 16 per cent o reflect a proactive decision to further reduce inventory at dealerships.
“However, our FY26 EPS estimates decrease by only 5 per cent to $9.55,” he said. “We continue to view several headwinds impacting FY25 as non-recurring and thus while FY25 will be more challenging than previously expected, we should see a strong earning recovery in FY26, assuming no further deterioration in the macroeconomic environment.”
“BRP has decided to take the short-term hit to reduce shipments and increase promotional support to its dealer partners to give them some breathing room,” said Mr. Poirier. “On the positive side, BRP maintained its $750-million FCF guidance, which should enable management to remain active with its NCIB.
“The opportunity remains over the long term to validate an improved risk/reward proposition as a function of the stability of its contracted and recurring revenue from its Energy Infrastructure and After Market Service business units, with support of the strong foundation offered by the backlog of its Engineered Systems division ,” he said. “To that point, net of one-time items in the first quarter, performance has been solid, with margins outperforming at 17.
On the broader OFS sector, he said: “On this basis, our pecking order skews as PD, TCW, PSI, CEU and EFX; however, at this time , we are maintaining our neutral stance and Sector Perform ratings across the group.”“And we believe the company is positioned to deliver growth when the macro environment improves,” he added.
Expressing concern about flat average loan balances and higher-than-anticipated provisions for credit losses, Mr. Young trimmed his 2024 and 2025 earnings expectations, leading him to lower his target for CWB shares by $1 to $32 with a “buy” rating. The average on the Street is $32.41.
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