Arctic Cat “reported very strong 1Q13 EPS results [during its earnings call last week], with an earnings beat provided by outperformance in every line of the income statement,” according to a research note provided to Powersports Business by BMO Capital Markets analyst Gerrick Johnson.
“Despite an increase in full-year guidance to a point that is still below Street consensus, the Street cheered these results,” Johnson reported. “We believe management’s guidance is overly conservative and that the company is performing well and taking share in a strong and growing powersports industry.”
Johnson is providing Arctic Cat shares with an “Outperform” rating.
“We believe ACAT benefits from a robust recreational vehicle market,” Johnson added. “We also believe ACAT is gaining market share, aided by the introduction of dynamic new products as well as an increase in distribution. With its most recently reported quarter showing extraordinary gains, the ACAT ‘beat and raise’ story appears to remain intact. We believe these strong results confirm a positive near-term growth opportunity.”
Johnson goes on to report that “most dealers are selling through their initial allocations [of Wildcats] faster than expected.”