DA Davidson has commenced its analysis of Brunswick (BC, Financial), assigning a Neutral rating. The firm has also set a price target of $43, a significant decrease from the previous target of $64.
Despite Brunswick's recent performance surpassing first-quarter earnings projections, the company reduced its fiscal year 2025 guidance. This adjustment reflects the assumption that existing tariff rates will continue, although the situation remains fluid, subject to change. Consequently, DA Davidson has opted to maintain a Neutral stance, citing uncertainties in the retail market as a contributing factor. The analyst's note suggests these conditions necessitate a cautious approach.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Brunswick Corp (BC, Financial) is $63.42 with a high estimate of $90.00 and a low estimate of $45.00. The average target implies an upside of 35.34% from the current price of $46.86. More detailed estimate data can be found on the Brunswick Corp (BC) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Brunswick Corp's (BC, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Brunswick Corp (BC, Financial) in one year is $71.36, suggesting a upside of 52.28% from the current price of $46.86. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Brunswick Corp (BC) Summary page.
BC Key Business Developments
Release Date: January 30, 2025
- Net Sales: Down 15% in Q4 2024 compared to Q4 2023.
- Adjusted Operating Margins: 4% in Q4 2024.
- Adjusted EPS: $0.24 for Q4 2024.
- Free Cash Flow: $278 million in Q4 2024, a record for any fourth quarter in Brunswick's history.
- Full Year Sales: Down 18% for 2024.
- Full Year Adjusted Operating Margins: 9.5% for 2024.
- Full Year Adjusted Diluted EPS: $4.57, down 48% for 2024.
- Free Cash Flow Conversion: 92% for the full year 2024.
- Share Repurchases: $200 million in 2024, representing approximately 2.5 million shares or 4% of the company.
- Propulsion Business Sales: Decreased 24% in 2024.
- US Engine Pipeline Reduction: Over 25,000 units in 2024.
- Boat Business Sales: Decreased 18% in Q4 2024.
- Freedom Boat Club Sales Contribution: Approximately 12% of the Boat segment sales.
- Cash on Hand: $287 million at the end of 2024.
- Capital Expenditures: $167 million in 2024.
- 2025 Guidance - Net Sales: Between $5.2 billion and $5.6 billion.
- 2025 Guidance - Adjusted Diluted EPS: Between $3.50 and $5.
- 2025 Guidance - Free Cash Flow: In excess of $350 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Brunswick Corp (BC, Financial) achieved significant cash generation in the fourth quarter of 2024, exceeding expectations.
- The company gained 110 basis points of US retail outboard engine market share during the year.
- Brunswick Corp (BC) completed $200 million in share repurchases in 2024, demonstrating strong capital strategy execution.
- The Freedom Boat Club had another strong quarter, expanding its locations and achieving over 600,000 annual member trips.
- The company showcased innovative new products at the Consumer Electronics Show, generating excitement and positive momentum.
Negative Points
- Net sales in the fourth quarter were down 15% compared to the previous year due to lower production and wholesale ordering.
- The company anticipates an annualized impact of approximately $35 million in 2025 due to tariffs.
- Adjusted operating earnings and margins declined versus the fourth quarter of 2023 due to lower net sales and decreased production levels.
- The uncertain tariff environment and foreign exchange rate fluctuations pose potential headwinds for 2025.
- Discounting and promotion levels remain elevated, particularly on prior model year products, affecting profitability.
