Jefferies has reduced its price target for Winnebago (WGO, Financial) from $38 to $35 while maintaining a Hold rating on the stock. This adjustment follows the company's preliminary announcement that its third-quarter sales and adjusted earnings per share are expected to fall short of both the firm's previous forecasts and general market expectations. According to the analyst, the primary reason for the revised outlook is reduced performance within the Motorized segment. Winnebago has indicated that it will release updated financial guidance for fiscal year 2025 during its Q3 earnings call set for June 25.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Winnebago Industries Inc (WGO, Financial) is $41.64 with a high estimate of $60.00 and a low estimate of $34.00. The average target implies an upside of 32.01% from the current price of $31.54. More detailed estimate data can be found on the Winnebago Industries Inc (WGO) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Winnebago Industries Inc's (WGO, Financial) average brokerage recommendation is currently 2.3, 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 Winnebago Industries Inc (WGO, Financial) in one year is $52.22, suggesting a upside of 65.57% from the current price of $31.54. 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 Winnebago Industries Inc (WGO) Summary page.
WGO Key Business Developments
Release Date: March 27, 2025
- Revenue: Consolidated revenue forecast reduced to a range of $2.8 billion to $3 billion from $2.9 billion to $3.2 billion.
- Gross Margin: Declined year over year due to product mix shift, but improved 110 basis points sequentially.
- Adjusted EBITDA Margin: Declined 340 basis points year over year; increased 140 basis points sequentially.
- Net Debt-to-EBITDA Ratio: Stood at 4.0 times, above the targeted range of 0.9 to 1.5 times.
- Share Repurchase: $20 million in stock repurchased with $180 million remaining under the program.
- Dividend: Quarterly dividend of $0.34 per share, marking the 43rd consecutive quarterly dividend.
- Adjusted EPS Guidance: Reduced to a range of $2.75 to $3.75 per diluted share from $3.10 to $4.40.
- Motorhome RV Segment: Revenue decreased year over year due to lower unit sales, partially offset by product mix.
- Towable RV Segment: Revenue increased modestly year over year due to higher unit volume.
- Marine Segment: Revenue increased due to unit volume, partially offset by a reduction in average selling price per unit.
- Barletta Market Share: Increased 140 basis points to 9.5% for the 12 months ended February 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Winnebago Industries Inc (WGO, Financial) reported sequential profitability improvements, driven by operating, pricing, and cost improvements in the Towable and Motorhome RV segments.
- The company is leveraging innovation as a strategic differentiator, with new product launches like the Grand Design's Lineage brand and Newmar's expanded model lineup.
- Winnebago Industries Inc (WGO) has a strong balance sheet, enabling it to fund organic growth, pursue acquisitions, and return capital to shareholders through dividends and repurchases.
- The Barletta brand increased its market share by 140 basis points to 9.5%, becoming the fastest-growing US aluminum pontoon brand in marine history.
- Winnebago Industries Inc (WGO) is revitalizing its Winnebago Towables brand with a new pricing strategy and emerging product strategy, aiming to expand market share and drive growth.
Negative Points
- The company faces a challenging sales environment due to soft retail conditions and growing macroeconomic uncertainty.
- Winnebago Industries Inc (WGO) reduced its fiscal 2025 adjusted EPS guidance due to reduced consumer confidence and sentiment.
- Gross margin declined year over year, primarily due to deleverage associated with a product mix shift towards more affordable models.
- The company is experiencing elevated warranty expenses in its Towable segment, impacting margins.
- Motorized RV field inventory remains elevated, with dealers being cautious about inventory levels due to retail pressure and aging stock.
