Spark continues to drive Sea-Doo growth, analyst reports

BMO Capital Markets Corp. analyst Gerrick Johnson recently attended the Miami Boat show. He provided the following research note to Powersports Business.

“We recently attended the Miami Boat show, the world’s largest boat show and the kick-off to the North American boating season. Based on feedback from that show, as well as others we attended before it, we think the outlook for BRP’s marine businesses is quite positive.

“We estimate that BRP’s marine business be about $775 million, or 22% of total sales, and note that dealers are seeing good demand for BRP’s Sea-Doo family of personal Watercraft (PWC), and are also reporting encouraging sales of the new Evinrude E-TEC G2 outboard engines. The jet boat market is also performing well (+16% in US in 2014 vs +9% for the overall industry), a positive for BRP’s Rotax engine business that provides boat builders the jet propulsion systems.

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“We believe the North American PWC industry grew over 20%, with a significant portion of it being driven by the new value-priced Sea-Doo Spark. Spark has, in fact, sparked the industry, as BRP intended. After a strong 2014 season, dealers are loading up on Sea-Doos and expecting another good year. We estimate Sea-Doo to be a $510 million business, and expect the company to report +18% growth in FY4Q15. For FY2016 (Jan ‘16) we expect Sea-Doo to grow +14% to $580 million. …”

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