Truist Securities analyst Michael A. Swartz reiterated a Buy rating on Brunswick Corporation BC, with an unchanged price target of $100.
Following the company’s investors’ day, the analyst notes BC’s tempered ’23/’24 commentary and the rolling back of prior L-T organic financial targets by 24 months ($15 in EPS by ’27).
While acknowledging that current market-related volatility and persisting uncertainty around ’24 earnings power will remain overhangs on the stock in the near term, the analyst remains constructive on the long-term view.
After attending the investor’s day, the analyst lowered the 2023/2024 adj. EPS estimates to $9.00 and $8.85, respectively (vs. $9.52 and $10.25 prior).
With regard to ’24, management anticipates a relatively stable demand environment (~150k domestic units retailed) with “flattish” sales/EPS YoY, Swartz adds.
For 2027, BC is targeting revenue of $8.7 billion and EPS of ~$15.
Swartz believes that the company’s near-term (’23/’24) outlook will remain a point of contention (is ~$9 in EPS for FY24 a ‘low enough’ bar?). However, the analyst doesn’t view the new ’27 targets (~6% revenue CAGR and ~12% EPS CAGR) as a Herculean effort, assuming the industry can return to modest growth by ’25.
KeyBanc Capital Markets analyst Noah Zatzkin sees near-term headwinds to persist for the company.
Following the investors’ day, Zatzkin’s FY23E EPS estimate goes to $9.30 (from $9.50) via the persistent marine channel pressures and weaker engine/Navico orders.
For FY24, the analyst’s EPS goes to $9.30 (from $10.15), reflecting softer 1H24 engine/boat dealer/OEM appetite and mgmt’s expected flattish industry boat retail.
The analyst maintains a Sector Weight rating on the stock.
Price Action: BC shares are trading higher by 1.99% to $77.79 on the last check Tuesday.