In a research note provided to Powersports Business following Arctic Cat’s first quarter earnings call, Baird analyst Craig Kennison gives an “outperform” rating to the company’s stock.
Noting that the company’s “fundamentals are solid,” Kennison writes that Baird likes “the new product cycle, lean inventory, Suzuki-related accretion, newer CEO [Claude Jordan] driving better execution and potential to reninstate the dividend — and advise investors to invest accumulate on weakness.”
Kennison goes on to report that Baird is “bullish on Arctic Cat fundamentals as spending, inventory and product cycles unfold. We believe discretionary consumer spending will recover slowly as unemployment falls and consumer confidence improves. Meanwhile, dealers are near the end of a very long de-stocking cycle, suggesting that inventory has bottomed.”
Kennison added that Baird expects Arctic Cat to ship in the range of 6,000 Wildcat units in fiscal 2013, “with upside as additional models are launched.”