BMO Capital Markets analyst Gerrick Johnson has initiated coverage of BRP with an outperform rating and a $32 target price, according to a research note provided to Powersports Business.
“We view BRP as a high-quality play on an early stage economic recovery,” Johnson writes. “We believe the company is also poised to grow sales and market share in existing markets through superior innovation. We also expect growth to come from entering strong new recreational markets that are early in their life cycle, as well as through the expansion of distribution, both in the underpenetrated markets in North America and internationally. …”
The 38-page report is an all-encompassing look at BRP and the various markets in which it competes. Johnson estimates BRP’s 2014 segment percent growth expectations as such:
In addition, Johnson reports that the recreational side-by-side category grew 29 percent in calendar 2012 after 46-percent growth in calendar 2011. “We anticipate further double-digit SSV industry growth over the next three years (22% in CY2013, 25% in CY2014 and 18% in CY2015).”
Johnson goes on to report “we estimate total SSV unit growth, including utility, at 17% in CY2012 and 20% in CY2011, and forecast 15% growth in CY2013, 20% growth in CY2014 and 15% growth in CY2015.”