Investment firm Baird has increased its price target for Polaris (PII, Financial) to $38, up from a previous target of $33, while maintaining a Neutral rating on the stock. The adjustment comes as the firm recalibrates its financial model to factor in potential impacts from tariffs related to China. This decision reflects the firm's ongoing evaluation of global trade dynamics and their implications for Polaris.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Polaris Inc (PII, Financial) is $33.73 with a high estimate of $48.00 and a low estimate of $22.00. The average target implies an downside of 12.71% from the current price of $38.64. More detailed estimate data can be found on the Polaris Inc (PII) Forecast page.
Based on the consensus recommendation from 16 brokerage firms, Polaris Inc's (PII, Financial) average brokerage recommendation is currently 3.1, indicating "Hold" 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 Polaris Inc (PII, Financial) in one year is $72.46, suggesting a upside of 87.53% from the current price of $38.64. 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 Polaris Inc (PII) Summary page.
PII Key Business Developments
Release Date: April 29, 2025
- Revenue: Sales were down 12% due to reduced shipments to manage dealer inventory.
- Adjusted EPS: Negative $0.90, at the midpoint of the guidance range.
- North American Retail: Down 7%, with better performance in utility business compared to recreational products.
- Snowmobile Retail Growth: Approximately 50% increase due to late-season snow.
- Gross Profit Margin: Down 147 basis points, impacted by promotions and economic downturn.
- International Sales: Dropped 16% due to weak markets in off-road and on-road.
- On-Road Sales: Down 20%, affected by challenging motorcycle market and timing of engine deliveries.
- Marine Sales: Down 7%, aligned with planned reduction in shipments.
- Operating Free Cash Flow: Highest Q1 operating free cash flow in nine years.
- Tariff Impact: Estimated less than $225 million net impact for 2025 after mitigation efforts.
- Dealer Inventory: Sequential dealer inventory reduced by over 20% from Q4 '24 to Q1 '25.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Polaris Inc (PII, Financial) has implemented a strategic approach to mitigate the impact of tariffs, including diversifying sourcing and optimizing production footprint.
- The company reported strong retail growth in its snowmobile business, with approximately 50% growth due to late-season snow.
- Polaris Inc (PII) has seen significant improvements in warranty claims for model year '25 vehicles, indicating enhanced product quality.
- The company achieved its highest Q1 operating free cash flow in nine years, demonstrating effective cash management.
- Polaris Inc (PII) continues to gain market share in motorcycles and pontoons, driven by innovative product offerings.
Negative Points
- Sales were down 12% in Q1, driven by reduced shipments to manage dealer inventory amidst a prolonged downturn in power sports.
- Adjusted EPS was negative $0.90, reflecting financial challenges in the current economic environment.
- The company has withdrawn its full-year guidance due to the fluidity of the tariff environment and economic uncertainties.
- Polaris Inc (PII) faces a competitive disadvantage due to tariffs, with an estimated gross tariff impact of $320 million to $370 million.
- The motorcycle market continues to be pressured both domestically and internationally, affecting sales performance.
