Wunderlich maintains its Buy rating on Polaris Industries Inc. (NYSE: PII) shares despite expecting continued challenges in the fourth quarter.
Polaris plans to report its fourth quarter results and give initial 2017 guidance on January 24. The brokerage sees revenue of $1.02 billion and EPS of $1.19, relatively consistent with consensus expectations.
Bullish Justification
“We believe that, given recent supply chain challenges and sluggish end markets in ORV and bikes, management could likely be rather conservative with their initial 2017 guidance for revenue growth and earnings,” analyst Rommel Dionisio wrote in a note.
Polaris’ widespread product recalls in off-road vehicles (ORV) has not only resulted in negative publicity for the brand, but also has diminished available throughput to dealers, thus resulting in tight dealer inventory levels exiting 2016.
But, Dionisio is bullish on the stock, with a $98 price target, as it believes Polaris remains the industry leader in the more lucrative side-by-sides segment. As a result, tight dealer inventory bodes well for upcoming quarters given expected order levels for new 2017 models.
Competition
On the competitive front, the analyst hopes there is a window of opportunity for Polaris to stabilize, or perhaps even regain, market share in side-by-sides, once it can step up throughput of 2017 models into dealerships.
Shares of Polaris closed Friday’s regular trading session at $86.32.
Latest Ratings for PII
| Jan 2017 | BMO Capital | Upgrades | Market Perform | Outperform |
| Dec 2016 | Cleveland Research | Initiates Coverage On | Neutral | |
| Nov 2016 | Jefferies | Assumes | Hold |
View More Analyst Ratings for PII
View the Latest Analyst Ratings
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